Summary
denying award of attorneys' fees where information regarding how the fees were accumulated was not provided even though the requested amount of $1,000 was reasonable
Summary of this case from Leser v. U.S. Bank Nat'l Ass'nOpinion
No. 00 Civ. 1089 (LTS)(KNF)
March 13, 2002
MEMORANDUM ORDER
This matter comes before the Court on the unopposed motion of Plaintiff Kingvision Pay-Per-View Corp., Ltd. ("Plaintiff" or "Kingvision"), for an order granting it a default judgment against The Body Shop, a commercial establishment with its principal place of business in New York ("Defendant"). Plaintiff commenced this action pursuant to 47 U.S.C. § 553 and 605, alleging that Defendant illegally intercepted and received or assisted in interception and receipt of a transmission of a boxing match between Julio Cesar Chavez and Miguel Angel Gonzalez (the "Event") without entering into a contractual agreement with the Plaintiff, which had exclusive rights to transmission and broadcast of the Event in the State of New York. Plaintiff seeks statutory damages and attorneys' fees and costs pursuant to 47 U.S.C. § 553 and 605 for willful unauthorized interception and transmission of the Event with the purpose of commercial advantage and private financial gain.
The Court has considered thoroughly all submissions related to this motion and the decision to be rendered reflects such consideration. For the following reasons, Plaintiff's motion is granted, and damages and costs are awarded to the extent set forth below.
Kingvision filed its Summons and Complaint in this action on February 14, 2000. The record reflects that Plaintiff filed with the Court on February 28, 2000, an affidavit of service of the Summons and Complaint attesting to personal service of the Summons and Complaint upon Jane Cooper, managing agent of Defendant The Body Shop. Defendant did not file an Answer. On November 27, 2000, Clerk of the Court issued a Certificate of Default as to The Body Shop.
The Complaint alleges that Kingvision entered into a closed-circuit television license agreement to exhibit the telecast of the March 7, 1998 boxing Event from Mexico City, Mexico at closed-circuit locations, such as theaters, arenas, bars, lounges, etc. throughout New York and other geographic locales. Compl. ¶ 8. Kingvision paid substantial fees for its exclusive right to exhibit the Event. Id. Kingvision sublicensed its rights in exchange for a fee to various business locations throughout New York. Id. ¶ 11. Telecast of the Event was transmitted by radio signal to a satellite and then to a system of cables that delivered it to Kingvision's subscribers. In order to ensure limited access to the transmission of the Event, plaintiff electronically encoded ("scrambled") the signal. Id. ¶ 12. To be received clearly, the signal had to be decoded with electronic equipment, which Kingvision provided to its authorized licensees along with satellite coordinates necessary to receive the transmission. Id. ¶¶ 12, 14. The only lawful way to view the Event was to purchase it through the Plaintiff's pay-per-view system. Id. ¶¶ 10, 11.
The Federal Rules of Civil Procedure require that a defendant respond within 20 days after being served with the Summons and Complaint. See Fed.R.Civ.P. 12(a)(1)(A). The Body Shop has not responded to the Summons and Complaint, nor has it sought additional time KINGVI.WPD version 3/13/02 2 to respond to the Complaint.
Kingvision, by letter to the Court dated December 11, 2000, requested permission to seek default judgment. On March 16, 2001, the Court granted Plaintiff permission to make a motion for a default judgment, such motion to be accompanied by admissible evidence Plaintiff would have proffered to meet the burden of proof on its direct case had a trial been held in this action. Plaintiff served a motion for default judgment on May 2, 2001 but failed to comply with the Court's directive that the motion be accompanied by such evidence. By order dated May 16, 2001, the Court denied Kingvision's motion for a default judgment without prejudice to its right to file and serve a new motion accompanied by admissible evidence sufficient to prove its direct case at trial.
On May 30, 2001 Plaintiff filed and served a new motion for a default judgment accompanied by, inter alia, the Affidavit of Facts in Support of Plaintiff's Motion for a Default Judgment of Marcus W. Corwin, an Attorney in Fact for Kingvision. In his affidavit, Mr. Corwin states that he is familiar with Kingvision's books, records and files and if called to testify would confirm that Kingvision maintained exclusive proprietary rights to the signal of the Event in question, that it licensed those rights to various closed-circuit locations throughout New York and other geographic locations, that establishments that contracted with Kingvision to broadcast the Event were provided with decoding equipment and satellite coordinates necessary to receive the transmission, that Defendant did not obtain authorization to receive and transmit telecast of the Event, that it wilfully intercepted and/or received, or assisted in its receipt and that it then transmitted, divulged and published, or assisted in transmitting, divulging and publishing said communication to the patrons of The Body Shop. See Aff. of Facts in Supp. of Pl.'s Mot. for a KINGVI.WPD version 3/13/02 3 Default J., ¶¶ 2, 4-7, 9. Plaintiff has also served on Defendant and submitted to the Court affidavits setting forth further evidence it would have presented on its affirmative case had the matter gone to trial. The evidence includes an eyewitness account by investigator Edward Murphy that, on the night in question, he observed the telecast of the Event at The Body Shop, and that there were four television sets and approximately thirty patrons on the premises and that Defendant charged a $5 cover to enter the establishment. (Pl.'s Mem. of Law, Exh. A.)
In deciding a motion for default judgment, the Court considers the following three factors: 1) whether the defendant's default was willful; 2) whether defendant has a meritorious defense to plaintiff's claims; and 3) the level of prejudice the non-defaulting party would suffer as a result of the denial of the motion for default judgment. See Mason Tenders District Council v. MM Contracting Consulting, 193 F.R.D. 112, 114-15 (S.D.N.Y. 2000). Dispositions of motions for default judgments are left to the sound discretion of the district court. See Shah v. New York State Dep't of Civil Service, 168 F.3d 610, 615 (2d Cir. 1999).
"[T]he core function of service is to supply notice of the pendency of a legal action, in a matter and a time that afford the defendant a fair opportunity to answer the Complaint and present defenses and objections." Henderson v. United States, 517 U.S. 654, 672 (1996), quoted in Citadel Management, Inc. v. Telesis Trust, Inc., 123 F. Supp.2d 133, 145 (S.D.N.Y. 2000). An entry of default judgment should be made only where there was willful default, such that the failure to answer was more than mere negligence or carelessness. See SEC v. McNulty, 137 F.3d 732, 738 (2d Cir. 1998). In light of all the circumstances previously outlined, the Court finds that Defendant The Body Shop, having failed to respond in any way to the Summons and Complaint or the instant motion, or otherwise to make any appearance in this action and having KINGVI.WPD version 3/13/02 4 failed to provide any explanation for its failure to defend, has defaulted willfully. Since Defendant has failed to proffer any defense and is therefore deemed to have admitted the well-pleaded allegations of the Complaint, other than those as to the amount of damage (Fed.R.Civ.P. 8(d)), the second factor — whether Defendant has a meritorious defense — is not at issue.
Plaintiff has documented proper service of its detailed Complaint and its motion papers. In light of Defendant's failure to respond, there is no indication that requiring Plaintiff to take further steps prior to a determination on the merits would be effective in eliciting a response from Defendant. Under these circumstances, denial of this motion would be unfairly prejudicial to Plaintiff.
Section 553(a) provides in pertinent part that "[n]o 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. . . ." 47 U.S.C.A. § 553(a) (West 1991). Subsection (c) of the statute creates a civil cause of action for persons aggrieved by the violations of subsection (a)(1) and provides such remedies as injunction, damages, costs and attorney's fees. 47 U.S.C.A. § 553(c) (West 1991). The aggrieved party may elect to recover actual damages pursuant to subsection (c)(3)(A)(i), or statutory damages for all violations involved in the action pursuant to subsection (c)(3)(A)(ii), namely a sum of no less than $250 and no more than $10,000 "as the court considers just." Id. Further, subsection (c)(3)(B) provides that it is within the Court's discretion to increase the award of damages by an amount of no more than $50,000 in cases where it finds that "the violation was committed willfully and for purposes of commercial advantage or private financial gain. . . ." Id.
Section 605(a) provides in pertinent part that "[n]o person not being authorized by KINGVI.WPD version 3/13/02 5 the sender shall intercept any radio communication and divulge or publish the existence, contents, substance, purport, effect or meaning of such communication to any person." 47 U.S.C.A. § 605(a) (West 1991). Subsection (e)(3) provides a civil cause of action for the aggrieved party, with remedies including injunction, damages, costs and attorneys' fees. 47 U.S.C. § 605(e)(3) (West Supp. 2001). Subsection (e)(3)(C) provides that the aggrieved party may elect to recover actual damages, or statutory damages for each violation in the amount of no less than $1,000 and no more than $10,000 "as the court considers just." 47 U.S.C.A. § 605(e)(3)(C)(i)(II) (West 1991). It further provides that the Court has discretion to increase the award of damages by an amount of no more than $100,000 if it finds that the violation in question was committed wilfully and for the purposes of commercial advantage or private financial gain. 47 U.S.C.A. § 605(e)(3)(C)(ii) (West 1991).
Under 47 U.S.C. § 605(e)(3)(B)(iii) an award of full costs, including attorneys' fees, is mandatory, whereas under 47 U.S.C. § 553(c)(2)(C), it is left to the discretion of the Court.
The telecast of the Event was initially transmitted to a satellite via radio signal and then through Kingvision's cable system to subscribers. See Aff. of Facts in Supp. of Pl.'s Mot. for a Default J. ¶¶ 5, 6. Therefore, Plaintiff's rights to the signal are protected by both 47 U.S.C. § 553, concerning cable system communications, and 47 U.S.C. § 605, concerning radio communications. Thus, when Defendant illegally intercepted the signal to which Plaintiff had exclusive rights and displayed the Event without Plaintiff's authorization, it violated both Sections 553 and 605.
Although Kingvision seeks to recover damages pursuant to both statutes, it is well-established that, when a defendant's conduct violates both Sections 553 and 605, Plaintiff may only recover damages pursuant to one of them. Time Warner Cable of New York City v. Barbosa, No. 98 Civ. 3522, 2001 WL 118608, at *5 (S.D.N.Y. Jan. 2, 2001); see also Int'l Cablevision, Inc. v. Sykes, 75 F.3d 123, 129 (2d Cir. 1996); KingVision Pay-Per-View, Ltd. v. Jasper Grocery, 152 F. Supp.2d 438, 441 (S.D.N.Y. 2001); Time Warner Cable of New York City v. Barnes, 13 F. Supp.2d 543, 548 (S.D.N.Y. 1998). In such cases the courts usually award damages pursuant to Section 605, allowing for more generous relief. See e.g., Sykes, 75 F.3d at 127; Jasper Grocery, 152 F. Supp.2d at 442; Cablevision Sys. New York City Corp. v. Flores, No. 00 Civ. 5935, 2001 WL 761085, at *3 (S.D.N.Y. July 6, 2001); Barbosa, 2001 WL 118608 at *5; Time Warner Cable of New York City v. Fland, No. 97 Civ. 7197, 1999 WL 1489144, at *1 (S.D.N.Y. Dec. 3, 1999). In determining the amount of the statutory damages award pursuant to 47 U.S.C. § 605, courts have developed two approaches: 1) estimating the amount of profits obtained by the defendant and/or the amount of loss (licensing fee) incurred by the Plaintiff, see e.g., Time Warner Cable of New York City v. Googies Luncheonette, Inc., 77 F. Supp.2d 485, 490 (S.D.N.Y. 1999) (awarding $50 per customer); Cablevision Sys. Corp. v. 45 Midland Enterprises, Ltd., 858 F. Supp. 42, 45 (same); or 2) awarding a flat sum for each violation, see e.g., Jasper Grocery, 152 F. Supp.2d at 442; Flores, 2001 WL 761085 at *4; Fland, 1999 WL 1489144 at *2. In any case, the amount of damages awarded must be proportional to plaintiff's loss and generous enough to ensure that plaintiff is fully compensated. Jasper Grocery 152 F. Supp.2d at 442. Several considerations are employed in calculating the amount of statutory damages to be awarded, included the amount of revenue lost by the aggrieved party and saved by the violator, the award's deterrent value, and the willfulness of the defendant's actions. See Flores 2001 WL 761085 at *3-4; Barbosa 2001 WL 118608 at *6; Cablevision Sys. New York City Corp. v. Faschitti, No. 94 Civ. 6830, 1996 WL 48689, at *2 (S.D.N.Y. Feb. 7, 1996).
Plaintiff seeks entry of judgment against Defendant The Body Shop. Based on the allegations of the Complaint and the additional evidence presented to the Court, the Court finds that The Body Shop's interceptions of the broadcast were willful. Further, Defendant's interception and display of the fight were committed for purposes of financial gain, as broadcast of the Event was clearly designed to draw potential customers and a fee was charged for access to Defendant's premises. Thus, the Court has discretion to award enhanced damages under Section 605. See Faschitti, 1996 WL 48689, at *2. Plaintiff represents that its normal sublicense fee for an establishment like The Body Shop would be $600 but argues for the deterrent value of a larger award. The Court holds that Plaintiff is entitled to the full $10,000 baseline statutory damages, as well as an additional $10,000 enhanced damages against Defendant The Body Shop. See, e.g., Faschitti, 1996 WL 48689 at *2-3; Kingvision v. New Paradise Rest., No. 99 Civ. 10020, 2000 WL 378053 at *2 (S.D.N.Y. April 1, 2000); King Vision v. Papacito Lidia Luncheonette, No. 01 Civ. 7575, 2001 WL 1558269 at *2 (S.D.N.Y. Dec. 6, 2001).
The "John Doe" defendants have never been identified and Plaintiff seeks judgment only as against The Body Shop.
Section 605 also mandates the Court to "direct the recovery of full costs, including reasonable attorneys' fees to an aggrieved party who prevails." 47 U.S.C. § 605(e)(3)(B)(iii). However, in New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136 (2d Cir. 1983), the Second Circuit Court of Appeals held that a party seeking an award of attorneys' fees must support its request by contemporaneous time records that show "for each attorney, the date, the hours expended, and the nature of the work done." Id. at 1154; see also Jasper Grocery, 152 F. Supp.2d at 443; Flores, 2001 WL 761085 at *4. "Failure to support a fee application with [such] records generally results in denial of any award." Jasper Grocery, 152 F. Supp.2d at 443 (citing Riordan v. Nationwide Mut. Fire Ins. Co., 977 F.2d 47, 53 (2d Cir. 1992)). In the present case, the amount of $1,000 requested by Kingvision for attorneys' fees is reasonable. However, Plaintiff does not support its request by any documentation showing how the fees were accumulated. Similarly, Kingvision asks the Court to award $250 in costs, but does not show how these expenses were incurred. Plaintiff's failure to submit detailed information regarding attorneys' fees and costs precludes such an award. See Jasper Grocery, 152 F. Supp.2d at 443 (denying award of attorney's fees where only general information was provided and awarding costs where sufficiently detailed information was provided as to how they were incurred).
Judgment will be entered against Defendant The Body Shop for $20,000.00. Plaintiff shall submit a proposed form of judgment on ten days' notice. The action is dismissed as against all other defendants.
SO ORDERED.