Joe Hand Promotions, Inc. v. Ol' River Hideaway, LLC et al

Filing 16

ORDER GRANTS IN PART & DENIES IN PART re 11 MOTION for Summary Judgment filed by Joe Hand Promotions, Inc., Defendant's shall pay the Plaintiff $3,000.00 in statutory damages, plus $990.00 in attorney's fees, plus post judgment interest. The Court DENIES Defendant's Objections to Plaintiff's evidence 12 . All other relief not granted herein is DENIED. The Court Cancels the hearing set for February 22, 2016. Signed by Judge David A. Ezra. (wg)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
JOE HAND PROMOTIONS, INC.,

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Plaintiff,
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vs.
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OL’ RIVER HIDEAWAY, LLC, and §
ROBERT KANE,
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Defendants.
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________________________________ §

NO. 5:15-CV-187-DAE

ORDER: (1) GRANTING IN PART AND DENYING IN PART MOTION FOR
SUMMARY JUDGMENT; AND (2) DENYING OBJECTIONS TO EVIDENCE
The matters before the Court are: (1) Plaintiff Joe Hand Promotions,
Inc. as Broadcast Licensee of the March 15, 2014 UFC 171: Hendricks v. Lawler
Event’s (“Plaintiff”) Motion for Summary Judgment (Dkt. # 11); and
(2) Defendant Ol’ River Hideaway, LLC, individually and doing business as Ol’
River Hideaway, Ol’River Hideaway, Kane’s Ol’ River Hideaway, Koozies Ice
House, and Koozies, and Defendant Robert Kane, individually and doing business
as Ol’River Hideaway, Kane's Ol’ River Hideaway, Koozies Ice House, Koozies,
also known as Robert M. Kane doing business as Ol’ River Hideaway’s
(collectively “Defendants”) Objections to Plaintiff’s Motion for Summary
Judgment Evidence (Dkt. # 12). Pursuant to Local Rule CV-7(h), the Court finds

this matter suitable for disposition without a hearing, and cancels the hearing set in
this case.
After careful consideration of the memoranda in support of and in
opposition to the motions, the Court, for the reasons that follow, GRANTS IN
PART and DENIES IN PART Plaintiff’s Motion for Summary Judgment (Dkt.
# 11), and DENIES Defendants’ Objections to Plaintiff’s Evidence (Dkt. # 12).
BACKGROUND
This case is an “anti-piracy” action under the Federal
Communications Act of 1934 (“Communications Act”), as amended, 47 U.S.C.
§§ 553 and 605.1 Plaintiff’s suit alleges that Defendants illegally and without
authorization intercepted the closed-circuit telecast of the March 14, 2015 UFC
171: Hendricks v. Lawler Event, including the undercard or preliminary bouts
(“the Event”), and exhibited the Event in Defendants’ establishment (“the bar”),

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Plaintiff’s claim in this case is brought only under § 605. (See Dkt. # 11 at 6.)
Section 605(a) states in relevant part, “[N]o person receiving, assisting in
receiving, transmitting, or assisting in transmitting, any interstate or foreign
communication by wire or radio shall divulge or publish the existence, contents,
substance, purport, effect, or meaning thereof, except through authorized channels
of transmission or reception . . . to any person other than the addressee, his agent,
or attorney. . . . No person not being authorized by the sender shall intercept any
radio communication and divulge or publish the existence, contents, substance,
purport, effect, or meaning of such intercepted communication to any person. No
person not being entitled thereto shall receive or assist in receiving any interstate or
foreign communication by radio and use such communication (or any information
therein contained) for his own benefit or for the benefit of another not entitled
thereto.”
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without paying the licensing fee to Plaintiff. (Dkt. # 1.) Plaintiff was a broadcast
licensee authorized to sublicense the Event at closed circuit locations, such as
theaters, arenas, bars, clubs, lounges, restaurants, and other commercial
establishments. Plaintiff has moved for summary judgment. (Dkt. # 11-1 at 6.)
I.

Objections to Evidence
As an initial matter, the Court will first address Defendants’

objections to Plaintiff’s summary judgment evidence. (Dkt. # 12.) Defendants’
object to Plaintiff’s inclusion of the affidavit of Thomas P. Riley as evidence in
support of summary judgment. (Id. at 2.) Specifically, Defendants contend that
the attachments to Riley’s affidavit, and portions of the affidavit itself, are hearsay,
not authenticated, and are made without personal knowledge. (Id. at 2–7.)
Defendants request that portions of the affidavit and its attachments be struck from
Plaintiff’s motion. (Id. at 7.)
Defendants’ objections are without merit. Riley’s affidavit meets the
business records exception to the hearsay rule, despite Defendants’ contention that
Plaintiff’s attorney does not claim to be the custodian or employee of Plaintiff.
Fed. R. Evid. 803(6). Other district courts determining claims under § 605 have
found Riley’s affidavit admissible under the same exception. See, e.g., Joe Hand
Promotions, Inc. v. 152 Bronx, L.P., 11 F. Supp. 3d 747, 758–59 (S.D. Tex. 2014).
These “courts . . . have determined that Riley’s affidavit and similar ones which
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ha[ve] been used to establish the substantial impact cable piracy has had on
Plaintiff’s business provide competent evidence in determining liability and
sufficient evidence in establishing the substantial impact cable piracy has on
Plaintiff’s business.” Id. at 759; J&J Sports Prods., Inc. v. Orellana, No. H-110574, 2012 WL 3155728, at *5 (S.D. Tex. Aug. 2, 2012). Additionally, the Fifth
Circuit has determined that the Distributorship Agreement, attached as an exhibit
to the affidavit, is independently admissible because contracts are not hearsay. See
152 Bronx, L.P., 11 F. Supp. 3d at 759 (citing Kepner-Tregoe, Inc. v. Leadership
Software, 12 F.3d 527, 540 (5th Cir. 1994)). And, the affidavit from the Event
auditor is admissible as a sworn statement of a person providing personal
observations of what he or she witnessed, regardless of whether it is a business
record. Id. The Court therefore DENIES Defendants’ objections to Plaintiff’s
summary judgment evidence (Dkt. # 12).
II.

Summary Judgment
A movant is entitled to summary judgment upon showing that “there

is no genuine dispute as to any material fact.” Fed. R. Civ. P. 56(a); see also
Meadaa v. K.A.P. Enters., L.L.C., 756 F.3d 875, 880 (5th Cir. 2014). A dispute is
only genuine “if the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986).
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The moving party bears the initial burden of demonstrating the
absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). If the moving party meets this burden, the nonmoving party must
come forward with specific facts that establish the existence of a genuine issue for
trial. Distribuidora Mari Jose, S.A. de C.V. v. Transmaritime, Inc., 738 F.3d 703,
706 (5th Cir. 2013) (quoting Allen v. Rapides Parish Sch. Bd., 204 F.3d 619, 621
(5th Cir. 2000)). “Where the record taken as a whole could not lead a rational trier
of fact to find for the non-moving party, there is no ‘genuine issue for trial.’”
Hillman v. Loga, 697 F.3d 299, 302 (5th Cir. 2012) (quoting Matsushita Elec.
Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
In deciding whether a fact issue has been created, the court must draw
all reasonable inferences in favor of the nonmoving party, and it “may not make
credibility determinations or weigh the evidence.” Tiblier v. Dlabal, 743 F.3d
1004, 1007 (5th Cir. 2014) (quoting Reeves v. Sanderson Plumbing Prods., Inc.,
530 U.S. 133, 150 (2000)). However, “[u]nsubstantiated assertions, improbable
inferences, and unsupported speculation are not sufficient to defeat a motion for
summary judgment.” United States v. Renda Marine, Inc., 667 F.3d 651, 655 (5th
Cir. 2012) (quoting Brown v. City of Hous., 337 F.3d 539, 541 (5th Cir. 2003)).

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A.

Liability Under 47 U.S.C. § 605
The parties do not dispute that Defendants advertised and broadcasted

the Event at their bar. (Dkt. # 11 at 4; Dkt. # 13 at 4.) Defendants, however, argue
that they believed they had the right to show the Event at the bar, without paying a
licensing fee to Plaintiff, because they had purchased the Event from their
television provider, Dish Network (“Dish”). (Dkt. # 13 at 6.) Defendants contend
that, through no fault of their own, their Dish account was set up and installed as a
residential account instead of a commercial account. (Id. at 4.) Thus, after paying
the residential rate for the Event, Defendants assert that they had no reason to
believe their showing of the Event would constitute a violation of a federal statute.
(Id. at 4–5.)
The Communications Act is a strict liability statute. To violate the
Communications Act, a plaintiff need only prove that (1) the Event was shown in
the Defendants’ establishment and (2) the plaintiff did not authorize the exhibition
of the Event at the establishment. 47 U.S.C. § 605; J&J Sports Prods., Inc. v.
Casita Guanajuato, Inc., 2014 WL 1092177, at *1 (W.D. Tex. Mar. 19, 2014).
First, there is no dispute that Defendants displayed the Event at the
bar on March 15, 2014. Second, Plaintiff has provided evidence that Defendants
did not have authorization or a valid commercial account to display the Event that
day. Accordingly, the Court finds that Plaintiff has successfully established
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Defendants’ liability pursuant to § 605. Furthermore, because § 605 is a strict
liability statute, then Defendants’ belief that they lawfully purchased the Event is
not a valid defense under the Communications Act. See, e.g., 152 Bronx, L.P.,
11 F. Supp. 3d at 753; Nat’l Satellite Sports, Inc. v. Eliadis, Inc. d/b/a Melody
Lane Lounge, 253 F.3d 900, 916–17 (6th Cir. 2001) (“Even assuming, as the
defendants contend, that there was no ‘interception’ here because [the bar] was
‘authorized’ by [the residential distributor] to receive the Event on a pay-per-view
basis, defendants still have violated the Act because they clearly were not
authorized to then broadcast the Event to the patrons of a commercial
establishment such as [the bar] .... The first and third sentences of [§ 605] do not
require an ‘interception’ of a cable transmission and clearly proscribe the
unauthorized divulgence or use of communications which have been ‘received’
legally for certain purposes.”); Garden City Boxing Club, Inc. v. Vinson, No.
3:03–CV–0700–BD (P), 2003 WL 22077958, at *2 (N.D. Tex. Sept. 3, 2003)
(“The fact that the defendant may have purchased and lawfully received the
Lewis–Tyson fight from DirectTV does not immunize her from liability for then
broadcasting the event to patrons at her bar without obtaining authorization from
the plaintiff, the exclusive licensee.”); Joe Hand Promotions, Inc. v. Lee, Civ. A.
No. H–11–2904, 2012 WL 1909348, at *3 (S.D. Tex. May 24, 2012); Orellana,

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2012 WL 3155728, at *4 (“Any unauthorized showing of the Event is a violation
of the Communications Act.”).
Plaintiff does not seek actual damages for Defendants’ violation, but
instead requests statutory damages under § 605 in an amount of $10,000. (Dkt.
# 11 at 8, 11.) Pursuant to § 605, the Court may award statutory damages of not
less than $1,000 or more than $10,000 per violation. 47 U.S.C.
§ 605(e)(3)(c)(i)(II).
The Court finds that a statutory damage award of $3,000 is
appropriate in this case. Here, Plaintiff could have charged $950 for a venue
comparable to Defendants’ bar. (Dkt. # 11-1 at 29 (stating that Defendants’ bar
has a capacity of approximately 100 people); Dkt. # 11-1 at 38 (noting a typical
charge of $950 for a venue seating according to the Fire Code Occupancy of 0-100
people)). An additional $2,050 is reasonable to deter future violations.
B.

Whether the Violation was “Willful” and for the Purpose of
“Commercial Advantage?”
Arguing that a willful violation for commercial advantage and

financial gain has been established, Plaintiff requests additional statutory damages
pursuant to § 605(e)(3)(C)(ii) in the amount of $50,000. (Dkt. # 11 at 14.) If the
Court finds that the “violation was committed willfully and for purposes of direct
or indirect commercial advantage or private financial gain,” it may, in its
discretion, award enhanced damages up to $100,000. Id. § 605(e)(3)(C)(ii). “In
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determining the amount of an award for willfulness damages where Defendants
intended to exhibit the Event to secure a private financial gain and direct
commercial advantage by misappropriating Plaintiff’s licensed exhibitions and
infringing on its rights, courts have considered such factors as the number of
televisions on which defendants broadcast the Event, the food and beverages it sold
to customers, as well as the cover charge, and whether it was broadcast in a
relatively urban city where the broadcast would have more than a minimal impact.”
See 152 Bronx, L.P., 11 F. Supp. 3d at 756 (collecting cases).
Defendants contend that they did not willfully violate § 605 because
they did not realize they were paying a residential rate for their satellite service.
(Dkt. # 13 at 3.) They assert that Dish agents and employees mistakenly set-up and
installed their account as a residential account, despite the fact that the bar was
obviously a commercial establishment. (Id.) As evidence, they attach a letter from
Dish, apologizing to Defendants and notifying them that their satellite account
“was incorrectly set up as a residential account on August 2, 2012.” (Dkt. # 13-1
at 22.) As such, they argue they should not be liable for willful violation of § 605.
(Id. at 5.)
In support of its contention that Defendants’ willfully violated the
statute, Plaintiff has presented evidence that Defendants (1) advertised the showing
of the Event, (2) broadcasted the Event on three televisions, one of which was a
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large screen 60” television, and (3) served beverages to the forty-four patrons that
were present at the bar during the Event. (Dkt. # 11-1 at 28–29.) Conversely,
Defendants have presented evidence that (1) there was no cover charge for the
event, (2) it did not charge a premium price for beer and wine (the only beverages
served at the bar), (3) the amount of patrons at the bar on March 15, 2014, was
consistent with its average customer base, and (4) its profit from wine and beer
sales that night was consistent with its sales during the previous thirty-day period.
(Dkt. # 13-1 at 3, 20.)
On this record, the Court finds that a willful damage violation is not
warranted under the circumstances of this case. There is no evidence that
Defendants repeatedly violated the law over an extended period of time. Nor is
there evidence that they received substantial monetary gain by receiving Plaintiff’s
satellite programming without its authorization. The statutory damage amount of
$3000 is sufficient to deter any future violation of § 605 by Defendants.
C.

Attorney’s Fees, Injunctive Relief, and Post-Judgment Interest
Plaintiff also seeks attorney’s fees in the amount of one-third its

recovery, or alternatively, for the hourly time rate of its attorneys. (Id. at 15.)
Under § 605, attorney’s fees and costs shall be awarded to an aggrieved party who
prevails. Id. § 605(e)(3)(B)(iii). Defendants contest the award of attorney’s fees in
this case. (Dkt. # 13 at 10–11.)
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In this case, the damages sought by Plaintiff greatly outweigh the
damages Plaintiff was ultimately awarded. It is clear that once Defendants realized
they were not paying the commercial rate for their Dish service, they attempted to
remedy the situation. (Dkt. # 13-1.) Still, although it may be arguable that
Defendants should have known that the rate they were paying was too low to be a
commercial rate, Plaintiff has failed to submit sufficient evidence that Defendants
knew they were paying less than they should be paying to Dish. Additionally, the
evidence indicates that Defendants attempted to settle this case with the vary
amount of statutory damages that the Court finds to be sufficient. (See Dkt. # 13-2
at 5.)
Because the statute provides that an aggrieved party who prevails is
entitled to an award of attorney’s fees and costs, Plaintiff is awarded its request of
one-third its recovery. Plaintiff is therefore awarded $990 in this case. Plaintiff
has not specified the amount of costs it seeks to recover, nor has it provided any
evidence establishing the costs it has incurred. Therefore, the Court will not award
any costs at this time.
Additionally, the Court finds that Plaintiff’s request for a permanent
injunction is unnecessary to the extent it is merely intended to prevent Defendants
from violating the Communications Act. The Court therefore denies Plaintiff's
request for a permanent injunction.
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CONCLUSION
Based on the foregoing, the Court GRANTS IN PART and DENIES
IN PART Plaintiff’s Motion for Summary Judgment (Dkt. # 11). Specifically,
Defendants shall pay Plaintiff: (1) $3,000.00 in statutory damages pursuant to 47
U.S.C. § 605 (e)(3)(C)(i)(II); plus (2) $990 in reasonable attorney’s fees; plus
(3) post-judgment interest to be calculated and compounded pursuant to 28 U.S.C.
§ 1961, until paid in full. The Court DENIES Defendants’ Objections to
Plaintiff’s Evidence (Dkt. # 12). All other relief not granted herein is DENIED.
In light of this Order, the Court CANCELS the hearing set in this case for
February 22, 2016.
IT IS SO ORDERED.
DATED: San Antonio, Texas, February 11, 2016.

_____________________________________
David Alan Ezra
Senior United States Distict Judge

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