J&J Sports Productions, Inc. v. Chance Club Corporation et al
Filing
36
ORDER GRANTING MOTION FOR SUMMARY JUDGMENT...granting 32 Motion for Summary Judgment filed by J&J Sports Productions Inc. In addition, J&J shall recover $10,000 in statutory damages; $20,000 in additional damages for willful violations of § 605; and $10,000 in attorneys' fees. Post-judgment interest shall accrue on these amounts at a rate of.12% per annum. [see Order for specifics] (Ordered by Judge Terry R Means on 10/28/2011) (klm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
J&J SPORTS PRODUCTIONS, INC.
§
§
VS.
§
§
CHANCE CLUB CORPORATION, et al. §
CIVIL ACTION NO. 4:10-CV-294-Y
ORDER GRANTING MOTION FOR SUMMARY JUDGMENT
Before the Court is the Motion for Summary Judgment (doc. 32)
filed by plaintiff J&J Sports Productions, Inc. (“J&J”).
By the
motion, J&J seeks summary judgment on its claims against defendants
James Andrew Lloyd and Barbara Dale Lloyd for alleged violations of
the Federal Communications Act (“FCA”).1
After review, the Court
will grant the motion.
I.
Background
J&J markets and licenses commercial exhibitions of pay-per-
view prizefight events.
(App. 6.)
One such event took place on
May 5, 2007, featuring world-famous boxers Oscar De La Hoya and
Floyd Mayweather Jr. (“the Event”).2
Pursuant to a licensing
agreement with the Event’s promoter, J&J was granted an exclusive
license to exhibit and sublicense the video presentation of the
Event at “closed-circuit” locations throughout the state of Texas,
such as theaters and restaurants.
1
(Id. at 6, 12-18.)
J&J has sued the Lloyds individually and doing business as “Monte
Carlos.”
2
The Event also included a number of preliminary fights known as
“undercard bouts.” (App. 6-7, 20.)
To safeguard against unauthorized video showings of the Event,
its interstate satellite video transmission was electronically
coded.
the
(Id. at 6.)
Authorized establishments were provided with
electronic-decoding
equipment
and
satellite
coordinates
necessary to receive the video signal of the Event.3 (Id. at 6-7.)
Each establishment was also charged a sublicense fee roughly
proportionate to the capacity of the establishment.4
(Id. at 7.)
Despite these safeguards, the Lloyds, as officers and managers
of Chance Club Corporation (“Chance”), broadcast a video depiction
of the Event at “Monte Carlos,” an establishment owned by Chance.
(Id. at 7, 20-22.)
The Lloyds broadcast the Event even though
Chance had not obtained a sublicense from J&J to do so.
(Id.)
According to J&J, the Lloyds could not have broadcast the Event
without making an intentional effort to intercept the satellite
transmission.
J&J therefore filed the instant lawsuit on April 28, 2010,
against Chance and the Lloyds, alleging violations of sections 553
and 605 of the FCA.
See 47 U.S.C.A. §§ 553 and 605 (West 2011).
The Court granted J&J’s motion for default judgment against Chance
on July 20, 2011 (doc. 34), and entered judgment against Chance
3
For certain authorized establishments, J&J simply contacted the
establishments’ satellite providers, rather than providing decoding equipment.
(App. 6-7.)
4
The customary fee for receiving transmission of the Event was calculated
by multiplying the relevant establishment’s maximum-fire-code capacity by twenty
(20). (App. 24.)
2
under Federal Rule of Civil Procedure 54(b) that same day (doc.
35).
By the instant motion, J&J seeks summary judgment on its
claims against the Lloyds, whom J&J contends are jointly and
severally liable with Chance.
II.
Discussion
A.
Summary-Judgment Standard
When the record establishes “that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as
a matter of law,” summary judgment is appropriate. Fed. R. Civ. P.
56(a). “[A dispute] is ‘genuine’ if it is real and substantial, as
opposed to merely formal, pretended, or a sham.”
Bazan v. Hidalgo
Cnty., 246 F.3d 481, 489 (5th Cir. 2001) (citation omitted).
A
fact is “material” if it “might affect the outcome of the suit
under governing law.”
Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986).
To demonstrate that a particular fact cannot be genuinely in
dispute, a plaintiff movant must cite to particular parts of
materials in the record (e.g., affidavits), or show either that (1)
the materials cited by the defendant do not establish the presence
of a genuine dispute as to that fact, or (2) the defendant cannot
produce admissible evidence to support that particular fact.
R. Civ. P. 56(c)(1).
Fed.
Although the Court “need consider only the
cited materials, . . . it may consider other materials in the
3
record.”
Fed. R. Civ. P. 56(c)(3).
In evaluating whether summary
judgment is appropriate, the Court “views the evidence in the light
most favorable to the nonmovant, drawing all reasonable inferences
in the nonmovant’s favor.”
F.3d
366,
380
(5th
Cir.
Sanders-Burns v. City of Plano, 594
2010)
(citation
omitted)
(internal
quotation marks omitted).
“When a party does not file an opposition to a motion for
summary judgment, the district court is permitted to consider the
facts listed in support of the motion as undisputed and grant
summary judgment if they show that the movant is entitled to
judgment in his favor.” Jegart v. Roman Catholic Church of Diocese
of Houma-Thibodaux, 384 F. App’x 398, 400 (5th Cir. 2010); see also
Probado Tech. Corp. v. SMARTnet, Inc., No. C-09-349, 2010 WL
4638902, at *3 (S.D. Tex. Nov. 8, 2010) (“If the non-movant fails
to respond to the motion for summary judgment, the facts attested
by movant’s affidavits must be deemed true and established.”
(citation omitted) (internal quotation marks omitted)).
“Failure
to respond to the summary judgment motion effectively waives the
non-movant’s opportunity to offer evidence or legal argument in
opposition to summary judgment.”
Probado, 2010 WL 4638902, at *3
(quoting Ervin v. Sprint Commc’ns Co., 364 F. App’x 114, 116 (5th
Cir. 2010)).
But the Court “may not grant a motion for summary judgment
merely because it is unopposed.” Id.; see also Hibernia Nat’l Bank
4
v. Administracion Cent. Sociedad Anonima, 776 F.2d 1277, 1279 (5th
Cir. 1985) (“A motion for summary judgment cannot be granted simply
because there is no opposition, even if the failure to oppose
violated a local rule.” (citation omitted)). “The movant still has
the initial burden of establishing the absence of a genuine
[dispute] of material fact.”
Probado, 2010 WL 4638902, at *3
(citing Hibernia, 776 F.2d at 1279).
The Court must grant summary
judgment
juror
only
“if
no
reasonable
could
find
for
the
non-movant.” Byers v. Dallas Morning News, Inc., 209 F.3d 419, 424
(5th Cir. 2000) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986)).
B.
Analysis
J&J asserts that the Lloyds are liable as a matter of law
under sections 553 and 605 of the FCA.
“Section 553(a)(1) [of the
FCA] provides that ‘no 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.’”
Prostar v. Massachi, 239 F.3d 669, 673 (5th Cir. 2001) (quoting 47
U.S.C.A. § 553(a)(1) (West 2011)).
Similarly, section 605 of the
FCA states that “[n]o person not being entitled thereto shall
receive
or
communication
assist
by
in
radio
receiving
and
use
any
such
interstate
or
communication
foreign
(or
any
information therein contained) for his own benefit or for the
benefit of another not entitled thereto.”
5
47 U.S.C.A. § 605(a).
“In addition, section 605 prohibits anyone unlawfully receiving
such communications from divulging or publishing the information or
transmission.
Both sections contemplate civil (and criminal)
enforcement measures.”
Prostar, 239 F.3d at 673 (citing 47
U.S.C.A. §§ 553(b)-(c); 605(a),(e)).
The evidence that J&J has produced in support of its motion
for summary judgment establishes that the Lloyds, as officers and
managers for Chance, unlawfully intercepted the video transmission
of the Event. While J&J has not presented direct evidence that the
Lloyds intercepted the transmission, “[c]ircumstantial evidence can
support a finding that a communication was intercepted, even absent
direct evidence.”
DIRECTV, Inc. v. Robson, 420 F.3d 532, 537 (5th
Cir. 2005) (footnote omitted).
The record indicates that the
Lloyds exhibited the video presentation of the Event at Monte
Carlos and that they did so without first obtaining authorization
from J&J, the holder of the exclusive right to sublicense video
transmission of the Event to Texas commercial venues.5
12-18,
20-22.)
This
is
sufficient
to
support
a
(App. 6-7,
finding
of
liability under sections 553 and 605.
Moreover, it is evident that the Lloyds’ interception of the
Event’s
video
transmission
was
willful
commercial advantage and private gain.
and
for
purposes
of
As one court noted,
5
According to the affidavit of investigator Guy C. Connelly IV
(incorporated into the affidavit of Thomas P. Riley as Exhibit A-2), Connelly
observed the Lloyds show the undercard bout between boxers Rey Bautista and
Sergio Medina to approximately thirty (30) patrons. (Ex. A-2., App. 20-21.)
6
“[s]ignals do not descramble spontaneously, nor do television sets
connect themselves to cable distribution systems.”
Time Warner
Cable v. Googies Luncheonette, Inc., 77 F. Supp. 2d 438, 442
(S.D.N.Y. 1999).
And “[w]hile [the Lloyds] may not have been
well-versed in the statutory restrictions on the unauthorized
interception of satellite transmissions, the Court finds that there
must have been some knowledge on the part of [the Lloyds] that such
interception could not be had for free.”
Kingvision Pay-Per-View,
Ltd. v. Valles, No. EP-00-CA-179-DB, 2001 WL 682205, at *3 (W.D.
Tex. Mar. 30, 2001).
In view of these findings, the Court concludes, as it did in
its July 20 default-judgment order, that J&J is entitled to the two
types of damages set out in 47 U.S.C.A. § 605(e)(3)(C).
With
regard to the first type, § 605(e)(3)(C)(i)(II) provides for
statutory damages “in a sum of not less than $1,000 or more than
$10,000,
as
the
court
605(e)(3)(C)(i)(II).
considers
just.”
47
U.S.C.A.
§
In addition, § 605(e)(3)(C)(ii) allows the
Court to increase the damages award “[i]n 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.”6
47
U.S.C.A.
§
6
605(e)(3)(C)(ii).
J&J
seeks
“The legislative history associated with section 553 and the amendments
to section 605 reveal that one of Congress's principal objectives was to
discourage theft of cable services. To that end, Congress articulated a variety
of penalties and remedies to protect the . . . television cable companies from
unauthorized reception of their transmissions.”
Prostar, 239 F.3d at 673
(footnotes omitted) (internal quotation marks omitted).
7
$10,000 in statutory damages and $50,000 in additional damages.
After review of J&J’s documentary evidence and the affidavit of
Thomas P. Riley, the Court concludes that an award of $10,000 in
statutory damages is reasonable, but that an award of $50,000 in
additional damages is too substantial an award to impose against
individual defendants under these circumstances.
Instead, the
Court will hold the Lloyds liable for $20,000 in additional
damages.7
See J&J Sports Prods., Inc. v. Gomez, No. H-10-871, 2010
WL 3154829, at *2 (S.D. Tex. Aug. 9, 2010) (awarding $10,000 in
statutory damages and $50,000 in additional damages in a case
involving similar facts); Entm’t by J&J, Inc. v. Al-Waha Enters.,
Inc.,
219
F.
Supp.
2d
769,
777
(S.D.
Tex.
2002)
(awarding
additional damages in the amount of three times the amount of
statutory damages).
The Court also concludes that J&J is entitled to reasonable
attorneys’ fees.
See 47 U.S.C.A. § 605(e)(3)(B)(iii) (“The court
. . . shall direct the recovery of full costs, including awarding
reasonable attorneys’ fees to an aggrieved party who prevails.”).
As J&J points out, this Court has considered it reasonable in antipiracy cases to award attorneys’ fees in the amount of one-third of
7
J&J contends, and the Court agrees, that it would be difficult to
determine the actual damages that J&J sustained as a result of the Lloyds’
unlawful exhibition of the Event.
Whenever an unauthorized establishment
exhibits a closed-circuit program, companies like J&J not only miss out on
licensing fees, but also sustain more indirect forms of damages. This includes
“los[ing] as
customers legitimate commercial establishments[,] which are
unwilling and financially unable to compete with those unauthorized commercial
establishments.” (App. 8.)
8
the total damages recovery.
See, e.g, Entm’t by J&J, Inc. v. Nuno,
No. 3:01-CV-0631-H, 2001 WL 896941, at *1 (N.D. Tex. Aug. 1, 2001)
(Sanders, J.).
Consistent with those cases, and after review of
the affidavit of David M. Diaz and the factors set out in Johnson
v. Georgia Highway Express, Inc., 488 F.2d 714, 717-719 (5th Cir.
1974), overruled on other grounds by Blanchard v. Bergeson, 489
U.S. 871 (1989), the Court concludes that J&J should recover
attorneys’ fees in the amount of one-third of the damages recovery
in this case.
Further, in the event that the Lloyds file any
unsuccessful post-judgment motions or institute any unsuccessful
appellate proceedings that require additional legal work by J&J’s
counsel, J&J should recover fees for that work as well.
Finally,
the
injunctive relief.
Court
concludes
that
J&J
is
entitled
to
Pursuant to § 605(e)(3)(B)(i), the Court “may
grant temporary and final injunctions on such terms as it may deem
reasonable.”
47 U.S.C.A. § 605(e)(3)(B)(i).
In the Court’s view,
given the Lloyds’ actions in this case, it is appropriate to enjoin
them
from
future
unlawful
interceptions
of
J&J’s
satellite
transmissions.
III.
Conclusion
Therefore, in view of the foregoing, the Court GRANTS J&J’s
motion for default judgment.
absent
prior
authorization
The Lloyds are hereby ENJOINED,
from
9
J&J,
from
intercepting
the
transmission of any closed-circuit program with respect to which
J&J possesses the rights to sublicense and exhibit.
J&J
shall
recover
$10,000
in
statutory
damages;
In addition,
$20,000
in
additional damages for willful violations of § 605; and $10,000 in
attorneys’ fees.
Post-judgment interest shall accrue on these
amounts at a rate of .12% per annum.
See 28 U.S.C.A. §
1961(a)
(West 2011).
In addition, the Court enters this conditional award of
attorneys’ fees:
(1) J&J shall recover an additional $10,000 in the event that
the Lloyds file any unsuccessful post-trial motions.
(2) J&J shall recover an additional $15,000 in the event that
the Lloyds file an unsuccessful appeal to the United
States Court of Appeals for the Fifth Circuit.
(3)
J&J shall recover an additional $5,000 in the event that
the Lloyds file a petition for writ of certiorari to the
United States Supreme Court if the petition is denied or
if the resultant proceedings do not lead to reversal of
at least a portion of the judgment entered by this Court.
(4)
J&J shall recover an additional $10,000 in the event that
it files a petition for writ of certiorari to the United
States Supreme Court if the writ is granted and if the
subsequent proceedings result in the complete restoration
of the judgment entered by this Court.
(5)
J&J shall recover an additional $2,500 for the collection
of the judgment entered in this case, should J&J obtain
a writ of execution, writ of garnishment, writ of
attachment, or other similar method of collection.
SIGNED October 28, 2011.
____________________________
TERRY R. MEANS
UNITED STATES DISTRICT JUDGE
10
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