J&J Sports Productions, Inc. v. Beck

Filing 7

MEMORANDUM AND ORDER granting Plaintiff's 4 MOTION for Default Judgment against Audrey Richey Beck. The request for injunction is denied. (Signed by Judge George P. Kazen) Parties notified. (dmorales, 5)

O 

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
LAREDO DIVISION

J&J SPORTS PRODUCTIONS, INC.,
Plaintiff,
v.
AUDREY RICHEY BECK,
INDIVIDUALLY AND D/B/A
DOUBLE A’S
Defendant.

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Civil Action No. L-13-57

MEMORANDUM
Pending before the Court is Plaintiff J&J Sports, Inc.’s
(“J&J”) Motion for Default Judgment.

(Dkt. 4.)

For the reasons

that follow, that motion will be GRANTED.
BACKGROUND
J&J

“is

in

the

business

of

marketing

and

licensing

commercial exhibitions of pay-per-view prizefight events,” and
“possessed the proprietary rights to exhibit and sublicense the
right to exhibit” the March 12, 2011 closed-circuit telecast of
“‘Relentless:’
Event”).

Cotto/Mayorga

(Dkt. 4 at 1-3.)

Fight

Program”

(hereinafter

“the

J&J “was licensed to exhibit the

Event at closed circuit locations, such as theaters, arenas,
clubs, lounges, restaurants and other commercial establishments
throughout the State of Texas.”

(Dkt. 4 at 3.)

A commercial

establishment in Texas could legally show the Event only by

paying

J&J

capacity.
“the

a

sublicensing

(Id.)

electronic

fee

based

on

the

establishment’s

J&J provided sublicensed establishments with
decoding

equipment

and

satellite

coordinates

necessary to receive the signal or the establishment’s cable or
satellite

provider

reception.”

would

be

notified

to

unscramble

the

(Id.)

Defendant Audrey Richey Beck was the owner of Double A’s,
located at 905 N. 14th Street, Kingsville, TX 78363.
1.)

(Dkt. 1 at

On March 12, 2011, an investigator hired by J&J observed

Double A’s displaying the Event to 20 to 33 patrons using one
projector,

three

televisions.
with

J&J

nor

42-inch

televisions,

(Dkt. 4-1, Ex. A-2.)
paid

the

required

and

two

27-inch

Beck had neither contracted
licensing

fee.

unlawfully intercepted the broadcast of the Event.

Rather,

she

(Dkt. 4-1,

Ex. A at ¶9.)
J&J filed its complaint on April 1, 2013, claiming that
Beck’s actions violated the Federal Communications Act of 1934,
as amended, 47 U.S.C. §§ 553 and 605.
served with process on May 3, 2013.

(Dkt. 1.)
(Dkt. 3.)

Beck was
When Beck

neither answered nor otherwise defended as required by Fed. R.
Civ. P. 12, J&J simultaneously filed a Request for Entry of
Default (Dkt. 5) and a Motion for Default Judgment (Dkt. 4).
The Clerk entered Beck’s default, pursuant to Fed. R. Civ. P.
55(a), on August 19, 2013.

2

(Dkt. 6.)

J&J’s Motion for Default

Judgment seeks recovery pursuant to 47 U.S.C. § 605 alone.

(See

Dkt. 4 at 19-20.)
DISCUSSION
By defaulting, a defendant “admits the plaintiff’s wellpleaded allegations of fact, is concluded on those facts by the
judgment, and is barred from contesting on appeal the facts thus
established.”

Nishimatsu Const. Co., Ltd. V. Houston Nat. Bank,

515 F.2d 1200, 1206 (5th Cir. 1975).

However, a defendant’s

default “does not in itself warrant . . . entering a default
judgment.”

Id.

Rather, “[t]here must be a sufficient basis in

the pleadings for the judgment entered.”

Id.

Further, damages

must be proven through “a hearing or a demonstration by detailed
affidavits establishing the necessary facts.”
Corp.

v.

Freeman,

605

F.2d

854,

857

(5th

United Artists
Cir.

1979)

(per

curiam).
I. Beck’s Liability
An individual violates the Communications Act (“the Act”)
by “intercept[ing] any radio communication . . . or receiv[ing]
or

assist[ing]

in

receiving

any

interstate

or

foreign

communication by radio . . . for his own benefit or for the
benefit of another not entitled thereto.”

47 U.S.C. § 605(a).

The pleadings establish that the Event’s broadcast originated
via satellite (i.e., a radio signal), and that Beck intercepted
or

3

received

the

broadcast

without

authorization

and

for

her

business’s benefit.

(See Dkt. 1 at 3-4.)

Accordingly, she is

liable under the Act.
II. Damages
The “party aggrieved” by a violation of § 605 may elect to
recover either actual damages or statutory damages in a sum not
less

than

$1,000

or

§ 605(e)(3)(C)(i).
range

between

committed

more

than

$10,000.

47

U.S.C.

That is, the base statutory damages must

$1,000

“willfully

and
and

$10,000.

for

If
of

purposes

the

violation

direct

or

was

indirect

financial advantage or private financial gain, the court in its
discretion may increase the award of damages . .
of not more than $100,000 . . . .”

by an amount

Id. § 605(e)(3)(C)(ii).

In

certain circumstances, then, a party may be entitled to $100,000
in

additional

statutory

damages,

over

damages or base statutory damages.
also

recover

reasonable

and

above

the

actual

The aggrieved party shall

attorneys’

fees.

Id.

§ 605(e)(3)(B)(iii).
J&J
damages.

has

opted

to

recover

statutory

rather

than

actual

It asks for base statutory damages of $10,000, the

maximum amount available.

To support its damages claims, J&J

submits an affidavit of Thomas P. Riley, an attorney hired by
J&J to deal with infringement claims.
3.)

4

(Dkt. 4-1, Ex. A at ¶¶2-

He avers that losses suffered by J&J include lost licensing

fees and lost good will from establishments that paid licensing
fees.

(Dkt. 4-1, Ex. A at ¶¶12-14.)

Further,

[t]he continued viability of [J&J] as a business
concern depends upon the willingness and ability of
legitimate commercial establishments to pay sublicense
fees for the right to broadcast closed-circuit sports
and entertainment programming, such as the Event. If
such programming is made available to the public for
no fee at unauthorized commercial establishments which
have not purchased the right to broadcast such
programming, legitimate commercial establishments will
find no reason to purchase the right to legally
broadcast this type of programming.
(Dkt. 4-1, Ex. A at ¶15.)

Moreover, to adequately deter piracy,

the cost of piracy must be significantly higher than the cost of
buying a license.

Entm't by J & J, Inc. v. Al-Waha Enterprises,

Inc., 219 F. Supp. 2d 769, 776 (S.D. Tex. 2002); (Dkt. 4-1, Ex.
A at ¶17).

Here, the licensing fee would have been between

$1,200 and $1,600.1

In these circumstances, the Court will award

$5,000 in base statutory damages.
at

776

(awarding

$5,000

in

See Al-Waha, 219 F. Supp. 2d

base

statutory

damages

where

licensing fee would have been $1,500).
J&J

also

seeks

$50,000

in

additional

statutory

damages,

claiming that Beck’s interception of the Event’s broadcast was
willful and undertaken for the purpose of direct or indirect
1

The J&J investigator predicted that Double A’s maximum
occupancy was approximately 120 people.
(Dkt. 4-1, Ex. A-2.)
For establishments with maximum occupancies of up to 100 people,
the licensing fee was $1,200; for maximum occupancies of 101 to
200 people, the fee was $1,600.
(Dkt. 4-1, Ex. A-3.)
Accordingly, the licensing fee for Double A’s would have been
between $1,200 and $1,600.
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commercial advantage or private financial gain.
18.)

(Dkt. 4 at 14-

J&J argues that one does not “innocently” or accidentally

intercept

a

scrambled

intentionally.

broadcast;

instead,

(Dkt. 4 at 14-15.)

it

must

be

done

That is, to intercept a

scrambled broadcast such as the broadcast of the Event,
there must be some wrongful action, such as using an
unauthorized
decoder
or
satellite
access
card,
obtaining cable or satellite service and illegally
altering the cable or satellite service to bring the
signal of the Event into the establishment, or moving
an authorized decoder or satellite card from its
authorized location to the commercial establishment.
(Dkt. 4-1, Ex. A at ¶10.)

J&J does not allege the use of any

particular descrambling technique, and it does not offer direct
evidence of willfulness.

However,

[b]ased on the limited methods of intercepting closed
circuit broadcasting of pay-per-view events and the
low probability that a commercial establishment could
intercept such a broadcast merely by chance . . .,
courts have held conduct such as that of [the
defendant] in this case to be willful and for the
purposes of direct or indirect commercial advantage or
private financial gain.
Al-Waha, 219 F.Supp.2d at 776.

Accordingly, the Court finds

that Beck’s actions were willful.
Further,

Beck

acted

for

direct

advantage or private financial gain.

or

indirect

commercial

Though Beck apparently did

not impose a cover charge for viewing the Event, Beck’s “patrons
purchased food and/or drinks while viewing the Event.”
1,

6

Ex.

A

¶11.)

Further,

it

is

obvious

that

(Dkt. 4commercial

establishments show sports programs to draw business, not out of
charity.
J&J asks for the award of additional statutory damages of
$50,000

for

However,

Beck

Beck’s
did

willful
not

interception

impose

a

cover

for

financial

charge,

only

gain.

about

30

patrons viewed the Event, and J&J does not allege that Beck is a
repeat offender.

Therefore, the Court will only award total

damages of $15,000, or three times the base award amount.

See

47 U.S.C. § 605(e)(3)(C)(iii) (award of additional damages is at
the Court’s discretion); see also Al-Waha, 219 F.Supp.2d at 776
(awarding treble damages in similar case where violation was
willful and for financial advantage).
J&J additionally seeks an award of attorneys’ fees.

As

support of its requested fees, it submits an affidavit from one
of its attorneys.
amount

of

“one

(Dkt. 4-1, Ex. B.)

third

of

awarded to [J&J] . . . .”

the

actual

J&J seeks fees in the
and

(Dkt. 4 at 19.)

additional

damages

In the alternative,

J&J seeks an award of $1,000 based on an hourly rate of $250 and
four hours of work.

(Id.;

Dkt. 4-1, Ex. B at ¶¶2, 8-9.)

The

Court finds that the latter figure is reasonable and accordingly
awards J&J attorneys’ fees in the sum of $1,000.
J&J also seeks additional attorneys’ fees based on certain
post-judgment contingencies.

(Dkt. 4 at 20.)

For example, J&J

seeks $15,000 “in the event a defendant files an appeal to the

7

Fifth

Circuit

Court

of

Appeals

that

does

not

result

reversal of the Judgment obtained in this action . . . .”
4-1, Ex. B at ¶10.)

in

a

(Dkt.

To support its request for contingent post-

judgment attorneys’ fees, the affidavit of J&J’s attorney merely
states

that

attorneys’

“[i]t
fees

Considering

is . . .

are

this

my

opinion

that

reasonable . . . .”

extremely

sparse

the
(Id.

evidence

following
at

¶10.)

about

the

reasonableness of the post-judgment attorneys’ fees, the Court
declines to award such fees.
Finally,
enjoins

J&J

[Beck]

requests

from

ever

“[a]

permanent

intercepting

injunction

or

that

exhibiting

an

unauthorized program in violation of the Federal Communications
Act.”

(Dkt. 4 at 20.)

Such an injunction would essentially

enjoin Beck from violating the law, which of course is already
her obligation.
injunction.

J&J does not explain why it needs or wants this

The request for injunction is denied.

DONE at Laredo, Texas, this 9th day of October, 2013.

___________________________________
George P. Kazen
Senior United States District Judge

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