J&J Sports Productions, Inc. v. Fredonia Enterprises, Inc. et al

Filing 15

ORDER GRANTING 14 MOTION for Default Judgment against Fredonia Enterprises, Inc. (Signed by Judge Gray H. Miller) Parties notified.(rkonieczny, 4)

United States District Court
Southern District of Texas

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
J&J SPORTS PRODUCTIONS, INC.,
Plaintiff,
v.
FREDONIA ENTERPRISES, INC., individually,
and d/b/a ELVIA’S CANTINA, et al.,
Defendants.

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ENTERED
January 21, 2016
David J. Bradley, Clerk

CIVIL ACTION H-15-1165

ORDER
Pending before the court is plaintiff J&J Sports Productions, Inc.’s (“J&J”) motion for default
judgment. Dkt. 14. After considering the complaint, motion, and evidentiary record, the court is of
the opinion that (1) the motion should be GRANTED against defendant Fredonia Enterprises, Inc.,
individually, and d/b/a Elvia’s Cantina (“Fredonia”); and (2) the claims against defendant Aldo
Rosso, individually, and d/b/a Elvia’s Cantina (“Rosso”) should be SEVERED.
I. BACKGROUND
J&J was a broadcast licensee authorized to sublicense the closed-circuit telecast of the May
5, 2012, Floyd Mayweather, Jr. v. Miguel Cotto, WBA World Light Middleweight Championship
Fight Program, including undercard or preliminary bouts (the “Event”). Dkt. 1 at 3. J&J was
licensed to exhibit the Event at closed circuit locations, such as theaters, arenas, bars, clubs, lounges,
restaurants, and other commercial establishments throughout Texas. Id. The closed circuit broadcast
of the Event could be exhibited in a commercial establishment only if the establishment was
contractually authorized by J&J. Id. J&J contracted with various establishments throughout the
state and granted those establishments the right to broadcast the Event in exchange for sublicense
fees. Id. After receiving sublicense fees, J&J provided these establishments with the electronic

decoding capability or satellite coordinates necessary to receive the satellite transmission of the
Event. Id. at 3–4.
On May 1, 2015, J&J brought this lawsuit, alleging that defendants Fredonia and Rosso
violated the Federal Communications Act of 1934, 47 U.S.C. §§ 553 or 605, by unlawfully
intercepting the interstate communication of the Event and exhibiting the Event to patrons at Elvia’s
Cantina without paying the required sublicense fee. Id. at 4–5. On August 19, 2015, J&J filed a
suggestion of bankruptcy as to Rosso. Dkt. 8. On September 1, 2015, the court stayed the case as
to Rosso, pending the resolution of the bankruptcy proceedings. Dkt. 9. The same day, the court
granted J&J’s motion for substitute service, authorizing J&J to serve Fredonia through the Texas
Secretary of State. Dkt. 10. On September 21, 2015, Fredonia was properly served with process
through the Texas Secretary of State. Dkt. 12. Fredonia’s deadline to answer or otherwise respond
was October 13, 2015. See Fed. R. Civ. P. 12(a). Fredonia was informed of its deadline for
responding and the consequences of failing to do so. Dkt. 12. To date, Fredonia has not answered
or otherwise responded to this lawsuit.
On November 20, 2015, J&J moved for entry of default judgment against Fredonia. Dkt. 14.
Pursuant to the Local Rules of the Southern District of Texas, J&J served the motion for default
judgment upon Fredonia via certified mail, return receipt requested. Id. at 11; see also S.D. Tex.
L.R. 5.5.
II. LEGAL STANDARD AND ANALYSIS
Under Federal Rule of Civil Procedure 55(a), “[w]hen a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by
affidavit or otherwise, the clerk must enter the party’s default.” Fed. R. Civ. P. 55(a). Fredonia has
failed to plead or otherwise defend against this lawsuit. Further, J&J properly served Fredonia with
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this lawsuit under the Federal Rules and with the motion for default judgment under the Local Rules.
Given Fredonia’s failure to answer the complaint in a timely manner, the court has the authority to
enter default against Fredonia, accept all well-pleaded facts in J&J’s complaint as true, and award
the relief sought by J&J in this action. See Nishimatsu Constr. Co. v. Hous. Nat’l Bank, 515 F.2d
1200, 1206 (5th Cir. 1975).
J&J initially alleged that Fredonia violated either 47 U.S.C. §§ 553 or 605. Dkt. 1 at 4. J&J
now moves for judgment under 47 U.S.C. § 605. Dkt. 14 at 4. Section 605 is applicable here
because transmission of the Event originated via satellite. Dkt. 14, Ex. A at 3; see also J&J Sports
Prods., Inc. v. Flor De Cuba, TX, Inc., No. 13-CV-3282, 2014 WL 6851943, at *2 (S.D. Tex. Dec.
3, 2014) (Rosenthal, J.) (noting that Section 605 applies to the theft of radio and satellite
communications, whereas Section 553 applies to the theft of communications from a cable network).
Section 605 is a strict liability statute. Joe Hand Promotions, Inc. v. 152 Bronx, L.P., 11 F. Supp.
3d 747, 753 (S.D. Tex. 2014) (Harmon, J.). To establish liability, J&J must show that (1) the Event
was exhibited in Fredonia’s establishment and (2) J&J did not authorize the particular exhibition of
the Event. Id. J&J’s well-pleaded complaint and affidavits establish both of these elements. Dkt. 1
at 3–4; Dkt. 14, Ex. A; Dkt. 14, Ex. A-2.
J&J seeks (1) statutory damages of $10,000; (2) additional damages of $50,000; (3)
attorney’s fees of either a one-third contingent fee or $1,000; (4) conditional attorney’s fees; (5)
costs; (6) post-judgment interest; and (7) a permanent injunction against Fredonia. Dkt. 14 at 9–10;
Dkt. 14, Ex. B; Dkt. 14-2.
The court may award statutory damages between $1,000 and $10,000.

47 U.S.C.

§ 605(e)(3)(C)(i)(II). The court finds that a statutory damages award of $5,000 is appropriate in this
case. Here, J&J could have charged $2,200 for a venue comparable to Elvia’s Cantina. See Dkt. 14,
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Ex. A-2 (stating that Elvia’s Cantina has a capacity of approximately 100 people); Dkt. 14, Ex. A-3
(noting a typical charge of $2,200 for a venue seating 0-100 people). An additional $2,800 is
reasonable to deter future violations.
The court may award additional damages of up to $100,000 where the violation was
committed willfully and for the purposes of private financial gain or commercial advantage. 47
U.S.C. § 605(e)(3)(C)(ii). An award of additional damages is warranted here because Fredonia must
have acted willfully and for the purposes of private financial gain in receiving the unauthorized
satellite signal and displaying the Event to its customers. See Time Warner Cable of N.Y.C. v.
Googies Luncheonette, Inc., 77 F. Supp. 2d 485, 490 (S.D.N.Y. 1999) (“There can be no doubt that
the violations were willful and committed for purposes of commercial advantage and private gain.
Signals do not descramble spontaneously, nor do television sets connect themselves to cable
distribution systems.”). The court finds that an award of additional damages equivalent to double
statutory damages is appropriate. See Joe Hand Promotions, Inc. v. Chios, Inc., No. 4:11-CV-2411,
2012 WL 3069935, at *5 (S.D. Tex. July 27, 2012) (Hoyt, J.) (“Generally, it is reasonable to increase
an actual or statutory damages award by a multiplier to penalize Defendants for willful acts.”), aff’d,
544 F. App’x 444 (5th Cir. 2013). Therefore, the court awards $10,000 in additional damages.
The court is required to award full costs, including reasonable attorney’s fees. 47 U.S.C.
§ 605(e)(3)(B)(iii). Attorney’s fees will be awarded in the amount of $1,000 because the court finds
that four hours of work at a blended rate of $250 is reasonable. Dkt. 14, Ex. B at 4–6. Costs will
be taxed in favor of J&J.
J&J is entitled to recover damages against Fredonia as detailed above, plus post-judgment
interest at the rate of 0.58% per annum. There shall be no award of pre-judgment interest.

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Furthermore, J&J is entitled to recover the following conditional awards of attorney’s fees
from Fredonia in the following circumstances:
a.

Ten Thousand Dollars ($10,000.00) in the event Fredonia files a motion to
vacate, Rule 60 motion, motion for new trial, motion for reconsideration or
other post-judgment, pre-appeal motion that does not result in a reversal of
the judgment obtained in this action;

b.

Fifteen Thousand Dollars ($15,000.00) in the event Fredonia files an appeal
to the Fifth Circuit Court of Appeals that does not result in a reversal of the
judgment obtained in this action;

c.

Five Thousand Dollars ($5,000.00) for making and/or responding to a petition
for certiorari to the U.S. Supreme Court that does not result in a reversal of
judgment obtained in this action;

d.

Ten Thousand Dollars ($10,000.00) for an appeal to the U.S. Supreme Court
in the event a petition for certiorari review is granted and does not result in
a reversal of judgment obtained in this action; and

e.

Two Thousand Five Hundred Dollars ($2,500.00) for collection of the judgment
rendered in this case, should J&J obtain a writ of execution, writ of garnishment, writ
of attachment, or other process.

Finally, the court may award a temporary or permanent injunction to “prevent or restrain”
violations of the statute. 47 U.S.C. § 605(e)(3)(B)(i). The court finds that an injunction is warranted
in these circumstances and grants J&J’s request for a permanent injunction against Fredonia.
III. CONCLUSION
For the foregoing reasons, J&J’s motion for default judgment (Dkt. 14) is GRANTED. This
judgment applies only to Fredonia. All claims against Rosso are hereby SEVERED. The court will
enter a separate final judgment against Fredonia consistent with this order.
Signed at Houston, Texas on January 21, 2016.

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Gray H. Miller
United States District Judge
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