J&J Sports Productions, Inc. v. Patino

Filing 12

MEMORANDUM OPINION AND ORDER GRANTING 9 Motion for Default Judgment and closing civil case. Signed by Judge David C Guaderrama. (em)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
EL PASO DIVISION
J&J SPORTS PRODUCTIONS, INC., as

Broadcast Licensee ofthe September 14,
2013 The One: Floyd Mayweather, Jr. v.
Saul Alvarez WBC Middleweight
Championship Fight Program,
Plaintiff,
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MICHAEL PATINO, individually, and
d/b/a Rock House Cafe & Gallery,

Defendant.

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EP-16-CV-00412-DCG

MEMORANDUM OPINION AND ORDER
Presently before the Court is Plaintiff J&J Sports Productions, Inc.'s ("Plaintiff')
"Motion for Final Default Judgment & Brief in Support" (ECF No. 9) ("Motion") filed in the
above-captioned action on March 10, 2017. Plaintiff brought this lawsuit alleging that
Defendant Michael Patino, individually, and d/b/a Rock House Cafe & Gallery, ("Defendant")
violated the Federal Communications Act of 1934. Although Defendant was served with a
summons in October 2016, to date, he has not answered Plaintiff's Complaint or otherwise
appeared in this case. By its Motion, Plaintiff asks the Court to enter a default judgment against
Defendant and award damages, costs, and attorneys' fees to Plaintiff. For the reasons that
follow, the Court GRANTS IN PART Plaintiff's Motion.

I. BACKGROUND
Plaintiff is in the business of marketing and licensing commercial exhibitions of
pay-per-view closed-circuit prizefight events. 1 In Texas, it has the exclusive authority to sublicense the telecast ofthe September 14,2013 "The One": Floyd Mayweather, Jr. v. Saul

Alvarez WBC Middleweight Championship Fight Program (the "Event") at closed-circuit
commercial locations such as restaurants, bars, and lounges. 2 On September 14,2013, the
transmission of the Event originated via satellite and was electronically coded or "scrambled."3
Broadcasts of the Event could only be exhibited in a commercial establishment if the
establishment had entered into a contractual relationship with Plaintiff,4 and thereby, obtained
from Plaintiff the electronic decoding equipment and the satellite coordinates necessary to
receive the signal. 5
On September 14,2013, Defendant Michael Patino owned, operated, and supervised
Rock House Cafe & Gallery (the "Establishment"), an El Paso, Texas commercial establishment
that sells food and beverages (though not alcoholic drinks) to its patrons. 6 On that day, alleges
Plaintiff, Defendant exhibited a telecast of the Event at his Establishment without Plaintiff's
authorization; Defendant never contracted with Plaintiff or paid Plaintiff the requisite licensing
fee. 7
1

Riley Aff., Mot., Ex. A, ~ 4, ECF No. 9-1.

2

Compl. ,, S--6, ECF No. 1.

3

Id ~ 8.

4

Id ~ 6.

5

Id ,, 8-10; Riley Aff. 14.

6

Compl. ~ 2; Padilla Aff., Ex. A-2 (stating that it is a "BYOB" establishment), ECF No. 9-1.

7

Compl. ,~ 9, 11, 13-15; Riley Aff., 9.

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On September 14, 2016, Plaintiff filed the instant lawsuit against Defendant, charging
him with illegally intercepting, receiving, and transmitting or publishing Plaintiff's telecast in
violation of 47 U.S.C. § 605, commonly known as the Federal Communications Act of 1934.

8

Id at 4. Thereafter, on October 13,2016, Plaintiff properly served Defendant with summons,
thereby causing his answer to be due on November 3, 2016. 9 To date, Defendant has not
answered to Plaintiff's Complaint in accordance with Federal Rule of Civil Procedure 12 10 or
otherwise appeared in this case. On March 10, 2017, Plaintiff filed its "Request for Entry of
Default" (ECF No. 8), and the Clerk of the Court entered default against Defendant pursuant to
Federal Rule of Civil Procedure 55(a)(1). 11 On the same day, Plaintiff filed the instant Motion.

II. APPLICABLE LAW
A. Legal Standard
Federal Rule of Civil Procedure 55 governs entry of default judgment. Initially, the clerk
of the court must enter default against a defendant, if the defendant fails to plead or otherwise
defend and the plaintiff shows that failure by affidavit or otherwise. See Fed. R. Civ. P. 55(a).
Thereafter, the plaintiff may move the court for a default judgment. See Fed. R. Civ. P. 55(b);

see also N. Y. Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996) ("After defendant's
default has been entered, plaintiff may apply for a judgment based on such default. This is a

default judgment." (emphasis added)). The court may grant the motion only if there is "a

8

Compl. ~ 16; Mot. ~ 6, ECF No. 9.

9

Summons Returned Executed, ECF No. 5.

° Federal Rule of Civil Procedure 12 provides that unless a different time is prescribed by
federal statute a defendant shall serve an answer within twenty-one days after being served with the
summons and complaint. Fed. R. Civ. P. 12(a)(l)(A)(i).
1

11

Entry of Default, ECF No.9.

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sufficient basis in the pleading for the [default] judgment." Nishimatsu Constr. Co. v. Hous.

Nat'/ Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). In addition to the complaint, the court, may
consider evidence that "simply add[s] factual details [and thereby] fleshe[s] out [the plaintifrs]
claim" or "serve[s] as further proof' of the plaintifrs allegations. Wooten v. McDonald Trans.

Assocs., Inc., 788 F.3d 490, 500 (5th Cir. 2015).
In assessing whether the complaint contains a sufficient basis for a default judgment, the
court applies the standard governing the sufficiency of a complaint under Federal Rule of Civil
Procedure 8. Wooten, 788 F.3d at 498 & n.3 ("Although most cases addressing Rule 8 arise in
the context of a Rule 12(b)(6) motion to dismiss, ... we decline to import Rule 12 standards into
the default-judgment context."). Rule 8 requires a pleading to contain "a short and plain
statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The
factual allegations in the complaint need only "be enough to raise a right to relief above the
speculative level, on the assumption that all the allegations in the complaint are true (even if
doubtful in fact)." Bell At/. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also Nishimatsu

Constr. Co., 515 F.2d at 1206 ("A default judgment [must be] supported by well-pleaded
allegations, assumed to be true."). "[D]etailed factual allegations" are not required, but the
complaint must present "more than an unadorned, the-defendant-unlawfully-harmed-me
accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Although a default judgment, which is a judgment on the merits, conclusively establishes
the defendant's liability, it does not establish the amount of damages. United States ex rei. M-

CO Constr., Inc. v. Shipco Gen., Inc., 814 F.2d 1011, 1014 (5th Cir. 1987). The complaint's
factual allegations regarding damages, even if well-pleaded, must still be proven. See id.
Damages should not be awarded absent "a hearing or a demonstration by detailed affidavits

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establishing the necessary facts." United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir.
1979). Rule 55(b)(2)(B) "explicitly grants the district court wide latitude" on whether to hold or
to "forego an evidentiary hearing" on the issue of damages. James v. Frame, 6 F.3d 307, 310
(5th Cir. 1993); see also Fed. R. Civ. P. 55(b)(2)(B). A hearing is not necessary if"the amount
claimed is a liquidated sum or one capable of mathematical calculation,"-i.e., "the amount is
easily computable." Freeman, 605 F.2d at 857; Richardson v. Salvation Army, S. Territory,

USA, 161 F.3d 7, 7, 1998 WL 723820, at *1 (5th Cir. 1998) (per curiam) (unpublished).
B. The Federal Communication Act

The Federal Communications Act (the FCA or Act) prohibits any unauthorized person
from "intercept[ing] any radio communication and divulg[ing] or publish[ing] the existence,
contents, substance, purport, effect, or meaning of such intercepted communication to any
person." 47 U.S.C. § 605(a). The Act creates a private right of action for "[a]ny person
aggrieved by any violation of[47 U.S.C. § 605(a)]." /d. § 605(e)(3)(A). To prevail on a claim
for violations of§ 605(a), a plaintiff must prove that a defendant "intercepted or otherwise
unlawfully appropriated" the plaintiff's communication. DIRECTV Inc. v. Robson, 420 F.3d
532, 537 (5th Cir. 2005). The remedies and penalties for the violations include: actual or
statutory damages, at the plaintiff's election; punitive damages; and costs, including attorneys'
fees. 47 U.S.C. § 605(e).
III. DISCUSSION

By its Motion, Plaintiff requests the Court to enter a default judgment in its favor and
against Defendant. Plaintiff seeks statutory compensatory damages under 47 U.S.C. §
605(e)(3)(C)(i)(II), see Mot.~~ 8, 14; statutory punitive damages under 47 U.S.C. §
605(e)(3)(C)(ii), id

~~

15, 21; and attorneys' fees and costs under 47 U.S.C. § 605(e)(3)(B)(iii),

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id

~~ 22,

23(3)-(4). Plaintiff also seeks post-judgment interest at the highest lawful rate. Id ~

23(4). In support of its Motion, Plaintiff submitted three affidavits: ( 1) an affidavit by Luis
Padilla, Plaintiff's auditor, who visited the Establishment on the night of the Event, see Padilla
Aff., supra; (2) an affidavit by Thomas P. Riley, an attorney who was retained by Plaintiff to
investigate Defendant's activities in connection with the Event, see Riley Aff., supra; and (3) an
affidavit by David M. Diaz, an attorney who represents Plaintiff in this case, Diaz Aff., Mot., Ex.
B, ECF No. 9-1.
As an initial matter, a "defendant, by his default, admits the plaintiffs well-pleaded
allegations of fact," but not ''conclusions of law." Nishimatsu Constr. Co., 515 F.2d at 1206.
Accordingly, in ruling on this Motion, where applicable, the Court will rely on well-pleaded
facts in Plaintiff's Complaint, accepting them as admitted, and facts stated in the affidavits,
accepting them as uncontroverted. See Wooten, supra, 788 F.3d at 500.

A. Plaintiff's Request for Default Judgment
Defendant's default serves to admit that Plaintiff had the exclusive right to sub-license
the Event on September 14, 2013. Compl.

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5-6. Defendant, by his default, also admits that

the Event was communicated via satellite and was electronically coded or scrambled. ld.

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8.

Likewise, Defendant admits that he intercepted and published the Event without authorization.

Id

~~ 9,

11, 13-15. As further proof, Riley declares that Defendant did not purchase the Event

from Plaintiff and was not otherwise authorized to receive the Event. Riley Aff. ~ 9. Moreover,
at the time of the Event's telecast, Plaintifrs auditor visited the Establishment and observed that
the Event was shown on a large projector to Defendant's patrons. Padilla Aff.
The Court finds that the Complaint "met the low threshold of content demanded by
Federal Rule of Civil Procedure 8," cf. Wooten, 788 F.3d at 494. Accordingly, the Court

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concludes that the admitted well-pleaded facts and the submitted evidence provide a sufficient
basis to hold that Defendant violated § 605 of the FCA. The Court therefore grants Plaintiffs
request for default judgment against Defendant.

B. Plaintiffs Requested Damages
1. Statutory Compensatory Damages
Plaintiff seeks the maximum recoverable amount of $10,000 in statutory damages
pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II).

Mot.~

8. That sub-section provides, in pertinent

part, that "the party aggrieved may recover an award of statutory damages for each violation of

[§ 605(a)] involved in the action in a sum of not less than $1,000 or more than $10,000, as the

court c(Jnsidersjust." § 605(e)(3)(C)(i)(II) (emphasis added). Thus, the amount of damages to
be awarded is within the sound discretion of the trial court, so long as the award falls within the
prescribed range.
The Court begins with a baseline award computed based on the sub-licensing fee that
Defendant should have paid to Plaintiff given the seating capacity of the Establishment. See Joe

Hand Promotions, Inc. v. Garcia, 546 F. Supp. 2d 383,386 (W.D. Tex. 2008) [hereinafter
Garcia I] (computing the fee based on the number of people and employing that fee as a starting
point for determining the proper amount of damages). The evidence shows that the
Establishment has a maximum capacity of eighty (80) persons. See Aff. Padilla ("The capacity
of this establishment is approximately 80 people."). Venues which seat between zero and 100
patrons must pay a licensing fee of$2,200. Mot., Ex. A-3 [hereinafter, Rate Card for the Event],
ECF No. 9-1. As such, the Court finds that Plaintiff is entitled to at least $2,200 in statutory
damages.

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However, as our sister courts have observed, "[t]he deterrence of future violations ... is
one ofthe objectives ofthe statute, as evidenced by the minimum award of$1,000," and "[t]here
would be no incentive to cease the violation if the penalty were merely the amount that should
have been paid." Entm 't byJ&J Inc. v. AI-Waha Enters., Inc., 219 F. Supp. 2d 769, 776 (S.D.
Tex. 2002). Consequently, courts typically increase the award based on licensing fee to
"account[] for ... any profits made from food and drink sales associated with customers who
stayed and watched the fight." Garcia I, 546 F. Supp. 2d at 3 86. In this case, there is evidence
that Defendant was charging $5 as cover charge; the Establishment sold food and non-alcoholic
beverages; and fifty-five individuals were present at the Establishment at the time of the Event's
telecast. Padilla Aff. Accordingly, the Court considers it just to award $2,750 in total as
Plaintiff's statutory compensatory damages under§ 605(e)(3)(C)(i)(II).

2. Statutory Punitive Damages
Plaintiff seeks additional $50,000 in damages pursuant to 47 U.S.C. § 605(e)(3)(C)(ii).
Mot.,, 15, 21. That sub-section provides, in relevant part, that if"the court finds that the
violation was committed willfully and for purposes of direct or indirect commercial advantage or
private financial gain, the court in its discretion may increase the award of damages ... by an
amount of not more than $100,000 for each violation." 47 U.S.C. § 605(e)(3)(C)(ii) (emphasis
added). Again, by its plain language, the statute gives a court discretion to enhance the damages
award.
While the FCA does not define "willfully," courts have applied the definition of
willfulness provided by the Supreme Court in civil contexts, under which courts inquire whether
a defendant's conduct entailed a "disregard for the governing statute and an indifference for its
requirements." Entm't byJ&J Inc., 219 F. Supp. 2d at 776-77 (quoting Trans World Airlines,

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Inc. v. Thurston, 469 U.S. 111, 127 (1985)). A trial court may infer the defendant's knowledge
of, and therefore disregard for, the statute, where, as here, the defendant exhibited the telecast at
a commercial establishment without proper authorization. See Kingvision Pay-Per-View, Ltd v.

Valles, Civ. A. No. 00-CA-179-DB, 2001 WL 682205, at *3 (W.D. Tex. Mar. 30, 2001) ("While
Defendants may not have been well-versed in the statutory restrictions ... there must have been
some knowledge on the part of Defendant[] that such interception could not be had for free.").
Moreover, the court may infer the defendant's indifference for the statutory requirements,
because of the sheer unlikelihood that a defendant could accidentally intercept or receive a
scrambled cable or satellite signal. See Garcia I, 546 F. Supp. 2d at 3 85. After all, "signals do
not descramble spontaneously, nor do television sets connect themselves to cable distribution
systems." Id (citing Time Warner Cable ofN. Y. C. v. Googies Luncheonette, Inc., 77 F. Supp. 2d
485,490 (S.D.N.Y. 1999)).
Here, Plaintiff submitted affidavits that demonstrate that the following facts necessary for
finding willfulness. Cj United Artists Corp., supra, 605 F.2d at 857. The transmission of the
Event was electronically coded or scrambled. Riley Aff.

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8. The Event could only be exhibited

in a commercial establishment if the establishment had obtained the electronic decoding
equipment and the satellite coordinates necessary to receive the signal from Plaintiff, which has
the exclusive authority to sub-license the Event in Texas. Id

~~

4-6; see also id, 9. Defendant,

who was not authorized to receive the transmission of the Event, received and exhibited the
telecast of the Event through some wrongful actions, 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." Id., 10.

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Applying the above-mentioned definition of "willful" to these facts, the Court concludes that
Defendant's acted willfully.
Further, Plaintiff's evidence supports that Defendant's actions were for purposes of direct
or indirect commercial advantage. The evidence indicates that Defendant charged $5 per person
for viewing the Event and had a sign in front of the Establishment announcing the Event and the
requisite cover charge. Padilla Aff. See Garden City Boxing Club, Inc. v. Sacks, No. B-07-97,
2008 WL 1711478, at *2 (S.D. Tex. Apr. 10, 2008) ("The Event was rebroadcast to the bar's
customers who paid a twenty dollar ($20) cover charge; therefore, this act of cable piracy was for
the purpose of direct or indirect commercial advantage."); J & J Sports Prods., Inc. v. Garcia,
No. H-08-1675, 2009 WL 2567891, at *4 (S.D. Tex. Aug. 14, 2009) [hereinafter Garcia II]
("Defendant openly advertised the Event on a marquee outside its establishment which serves as
evidence that the Event was shown for the purpose of commercial advantage or private financial
gains.").
Nevertheless, the Court finds that Plaintiff's requested damages of$50,000 are excessive.
The Court is mindful that the purpose of these enhanced damages is to discourage would-be
pirates, including Defendant from engaging in piracy in the future-but not to drive Defendant
out of business. See Garcia I, 546 F. Supp. 2d at 386 ("Defendant is not a major chain, and
while this violation deserves to be punished, it should not be done in a manner than imposes an
insurmountable financial burden."). Accordingly, the Court awards Plaintiff an additional
$1,100 in damages, fmding the sum to be reasonable in light of Defendant's actions.

3. Attorneys' Fees, Costs, and Post-Judgment Interest
The FCA provides that the court "shall direct the recovery of full costs, including
awarding reasonable attorneys' fees to an aggrieved party who prevails." 47 U.S.C. §

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605(e)(3)(B)(iii) (emphasis added). Plaintiff seeks an award of attorneys' fees in the amount of
one-third of its recovery, or in the alternative, the hourly time spent for prosecution of this case
through default judgment, along with fees for post-trial and appellate services. Mot. ~ 23(3). In
support, Counsel for Plaintiff, in a sworn affidavit, affirms that four (4) hours is a reasonable
estimate of the amount of time spent on this case by Plaintiffs lawyers. Diaz Aff. ~ 9. Further,
Counsel avers that the rate of $250.00 per hour is reasonable given his experience and the type of
litigation involved in this case. Id The Court finds that $1,000 is a fair and reasonable lodestar
in this case.
The Court awards Plaintiff its full costs. Fed. R. Civ. P. 54 ("Unless a federal statute,
these rules, or a court order provides otherwise, costs--other than attorney's fees--should be
allowed to the prevailing party."). Plaintiff may file a proposed bill of costs in accordance with
Local Court Rule CV-54(a). Further, the Court awards post-judgment interest, which shall be
"calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1year constant maturity Treasury yield, as published by the Board of Governors of the Federal
Reserve System, for the calendar week preceding the date of the judgment." 28 U.S.C. §
1961(a). Such interest shall be computed and compounded as provided in 28 U.S.C. § 1961(b).

IV.

CONCLUSION

For the foregoing reasons, the Court enters the following orders:

IT IS ORDERED that Plaintiff J&J Sports Productions, Inc.'s "Motion for Final Default
Judgment & Brief in Support" (ECF No.9) is GRANTED IN PART.

IT IS THEREFORE ORDERED that DEFAULT JUDGMENT is HEREBY
ENTERED in favor of J&J Sports Productions, Inc., and against Defendant Michael Patino,

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individually, and d/b/a Rock House Cafe & Gallery. Defendant SHALL PAY J&J Sports
Productions, Inc.:
a. $2,750 in statutory damages pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II);
b. $1,100 in punitive damages pursuant to 47 U.S.C. § 605(e)(3)(C)(ii); and
c. $1,000 in reasonable attorneys' fees pursuant to 47 U.S.C. § 605(e)(3)(B)(iii).

In total, the court GRANTS default judgment in favor of J&J Sports Productions, Inc. and
against Michael Patino, individually, and d/b/a Rock House Cafe & Gallery, in the amount of
$4,850 plus costs. Plaintiff may file a proposed bill of costs in accordance with Local Court
Rule CV-54(a) within 14 days of this Opinion and Order.

IT IS FURTHER ORDERED that Michael Patino, individually, and d/b/a Rock House
Cafe & Gallery, SHALL PAY post-judgment interest at the rate of 1.07%, until paid in full, to
be compounded annually pursuant to the provisions of28 U.S.C. § 1961(b).

IT IS FINALLY ORDERED that the District Clerk SHALL CLOSE this case after
docketing the Final Judgment to be issued separately on this day.

So ORDERED and SIGNED this _2L~ay of May 2017.

UNITED STATES DISTRICT JUDGE

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