Summary
increasing the damages to $2,000.00 where the licensing fee would have cost the liable establishment $1,000.00
Summary of this case from J & J Sports Prods., Inc. v. J & O LLCOpinion
01 Civ. 6562 (SHS)
December 10, 2001
OPINION ORDER
Plaintiff Kingvision Pay-Per-View, Ltd. ("Kingvision") brings this action against defendants El Rey Del Bistec Y Caridad, Inc. and Luis Taveres, (collectively "Caridad") for pirating its Pay-Per-View closed-circuit television services. Kingvision now moves by motion on notice to defendants for a default judgment and damages. Plaintiff seeks statutory damages, attorney's fees, and costs pursuant to the Communications Act of 1934, as amended 47 U.S.C. § § 553(a)(1), 605(a). Based upon the complaint, memorandum of law in support by Kingvision, the sworn affidavit of Thomas Fitzgibbon — its investigator — and the affirmation of Joseph J. Capetola in support of attorney's fees, judgment shall enter in favor of Kingvision in the amount of $3,000 plus $2,075 in attorney's fees together with costs.
BACKGROUND
Kingvision entered into an exclusive licensing contract with Don King Productions that afforded Kingvision the exclusive rights to broadcast, on closed-circuit television, the March 13, 1999 Holyfield vs. Lewis boxing event from Madison Square Garden in New York City. (Compl. ¶ 7.) Kingvision entered into this agreement in order to sublicense the right to broadcast the event in closed-circuit arenas, e.g., bars, clubs, lounges, and restaurants. (Id. ¶¶ 7-9.) The fight could only be broadcast in an establishment upon entering into a contractual obligation with Kingvision. (Id. ¶ 9.) Caridad is a restaurant and bar located at 565 West 207th Street, in Manhattan. (Id. ¶ 5.) Luis Tavares is the owner of Caridad. (Id. ¶ 6.)
On March 13, 1999, plaintiffs investigator, Thomas Fitzgibbon, entered Caridad at 12:10 a.m. (Fitzgibbon Aff.) He was not charged a cover charge for entry into Caridad. (Id.) While in Caridad's for approximately two minutes, Fitzgibbon observed the broadcast of the Holyfield-Lewis fight on a 27 inch color television that was suspended from the ceiling. (Id.) According to the complaint, Caridad was able to broadcast the event through the use of a descrambler that decoded Kingvision's encrytped programming signal, thus permitting Caridad to show the boxing match at no cost to it. (Compl. ¶¶ 11-18.)
During Fitzgibbon's two minute stay in Caridad, he counted the number of patrons in the establishment three times and concluded that between 35-40 customers plus three employees were present. (Fitzgibbon Aff.) Kingvision's memorandum in support of this motion asserts that Caridad had a capacity of fifty people. (Pl. Mem. at 10.) Using this figure, Kingvision estimates that had Caridad sought to legally broadcast the fight, the licensing fee would have been $1,000. (Id.)
Plaintiff seeks statutory damages pursuant to sections 553 and 605 totaling $60,000 plus its attorney's fees and costs.
DISCUSSION
As both Caridad and Taveres have failed to appear in this action despite being properly served with the summons and complaint, their liability is established on the well-pleaded allegations of the complaint. Bambu Sales, Inc. v. Ozak Trading, Inc., 58 F.3d 849, 854 (2d Cir. 1995). As noted above, Kingvision seeks statutory damages pursuant to 47 U.S.C. § 553(a) and 605(a). Recovery pursuant to those provisions is not cumulative. Where there is a violation of both sections, recovery is only permitted under one statute, at plaintiffs election. See International Cablevision, Inc. v. Sykes, 75 F.3d 123, 129 (2d Cir. 1996). As here, plaintiffs usually choose recovery pursuant to section 605 because it provides for greater monetary damages. See id.
Section 605(a) provides, in part: "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." As Kingvision broadcast the event via satellite communication, Caridad's unauthorized use of a descrambler violated section 605(a).
The remaining issue is what damages pursuant to section 605(e) are appropriate in this action. Section 605(e)(3)(C)(i)(II) provides for damages not less than $1,000 nor more than $10,000, "as the court considers just." Further, section 605(e)(3)(C)(ii) provides for a damage enhancement to an amount not exceeding $100,000, if the court finds that the defendant acted "willfully and for purposes of direct or indirect commercial advantage or private financial gain."
Courts have used three different methods to calculate damages pursuant to these sections and this rather typical set of facts: (1) apply a multiplier to the minimum statutory rate; (2) apply a multiplier to the cost of obtaining a license to broadcast the event legally; or (3) assess a per customer charge. Compare Kingvision Pay-Per-View, Ltd. v. Valles, No. EP-00-CA-179-DB, 2001 WL 682205, at 1 (W.D. Tex. Mar. 30, 2001) and Joe Hand Promotions v. Burg's Lounge, 955 F. Supp. 42 (E.D. Pa. 1997)with Kingvision Py-Per-View, Ltd. v. Scott E's Pub, Inc., 146 F. Supp.2d 955 (E.D. Wis. 2001) with Cablevision Sys. Corp. v. 45 Midland Enterprises, Inc., 858 F. Supp. 42 (S.D.N.Y. 1994).
Here plaintiff seeks $60,000 plus attorney's fees and costs. The Court finds that amount would grossly overcompensate Kingvision and would be so excessive that it would likely put a small establishment such as Caridad out of business. Kingvision has represented that had Caridad sought to broadcast the boxing event to its patrons legally, it would have received permission to do so for $1,000. The Court agrees with Kingvision that an assessment of damages at merely actual cost would not be an appropriate sum. Indisputably, the pirating of electronic transmissions is a serious problem. This Court alone has a number of these cases on its docket. As such, deterrence is important and in accord with the legislative intent.See International Cablevision, Inc. v. Sykes, 997 F.2d 998, 1003 (2d Cir. 1993). Thus, it is appropriate that damages be assessed at $2,000, which is twice the actual cost.
Kingvision further requests an enhancement of damages for willfulness in the sum of $50,000. Courts use a variety of factors in determining whether a defendant's conduct is subject to enhanced damages for willfulness pursuant to 47 U.S.C. § 605(e)(3)(C)(ii). These factors include allegations of: repeated violations over an extended period of time; substantial unlawful monetary gains; significant actual damages to plaintiff defendant's advertising for the intended broadcast of the event; defendant's charging a cover charge or charging premiums for food and drinks. See Home Box Office v. Champs of New Haven Inc., 837 F. Supp. 480 (D. Conn. 1993).
There has been no proof that Caridad (1) had pirated other events, (2) advertised the broadcast of the fight, or (3) charged a cover charge or a premium on food and drinks. Nonetheless, Caridad's actions were willful since it had to take affirmative action to descramble Kingvision's satellite signal and it did gain financial advantage by selling food and drink during the event to its nearly two score customers. Additionally, Caridad's affirmative actions to intercept the cable signal and broadcast the fight manifest a complete disregard for the statute. Taking all these factors into account, as well as the fact that the fight was broadcast only on one small 27 inch color television, the Court finds an enhancement of $1,000 for willfulness is appropriate.
Kingvision further requests, and section 605(e)(3)(B)(iii) provides for, the full recovery of costs, including reasonable attorney's fees. The Court has examined Kingvision's request for attorney's fees with its attendant documentation and finds that the amount of $2,075 is reasonable.
CONCLUSION
For the foregoing reasons, judgment shall enter in favor of Kingvision and against defendants Caridad and Taveres in the amount of $2,000 pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II) and $1,000 pursuant to 47 U.S.C. § 605(e)(3)(C)(ii) for willfulness for a total sum of $3,000 plus attorney's fees in the amount of $2,075 and costs.
SO ORDERED