Opinion
00 Civ. 6694 (RMB)(KNF)
May 5, 2003
REPORT AND RECOMMENDATION
TO THE HONORABLE RICHARD M. BERMAN, UNITED STATES DISTRICT JUDGE
I. INTRODUCTION
In this action, plaintiff Kingvision Pay-Per-View, Ltd. ("Kingvision") alleges that defendants Milagros Aponte ("Aponte"), individually and d/b/a Amsterdam Cafe and Billiards ("Amsterdam Cafe"), Amsterdam Cafe, Danilo B. Vazquez Garcia ("Garcia"), individually, and d/b/a Buena Vista Billiards ("Buena Vista"), Buena Vista, Fusion Restaurant Inc. ("Fusion"), El Conde Rest. Corp. ("El Conde"), Julio Maguina ("Maguina"), individually, and as an officer, director, shareholder and/or principal of J R Café Corp. ("J R Café"), J R Café, Griselda Reyes ("Reyes"), individually, and as an officer, director, shareholder and/or principal of Las Hermanas Rest. Inc. ("Las Hermanas"), Las Hermanas, Frances Ortiz ("Ortiz"), individually and d/b/a Los Marranos Luncheonette ("Los Marranos"), Los Marranos, Nacho's Social Club ("Nacho's"), Miguel Peralta ("Peralta"), individually, and d/b/a M P Tenares Restaurant ("M P Tenares"), and M P Tenares (collectively "defendants") engaged in the illegal interception of a transmission of a boxing match between Felix Trinidad and David Reid ("Trinidad/Reid Fight"), on March 3, 2000, and exhibited the event at the time of its transmission willfully and for the purposes of commercial advantage or private financial gain, in violation of the Cable Communications Policy Act ("Communications Act"), as amended, 47 U.S.C. § 553 and 605.
Upon the defendants' failure to file an answer or otherwise respond to the Complaint, your Honor ordered that a default judgment be entered against them. Thereafter, your Honor referred the matter to the undersigned to conduct an inquest and to report and recommend the amount of damages, if any, to be awarded against the defendants. The Court directed Kingvision to serve and file its proposed findings of fact and conclusions of law, and an inquest memorandum setting forth its proof of damages, costs of this action and its attorneys' fees. Defendants were directed by the Court to serve and file any opposing memoranda, affidavits and exhibits, as well as any alternative findings of fact and conclusions of law they deemed appropriate.
The default judgment entered on March 29, 2001, included among the defaulting defendants the following: Manuel Pichardo ("Pichardo"), individually, and as an officer, director, shareholder and/or principal of El Despertar Restaurant, Inc. ("El Despertar"), El Despertar, and Vampiros Corp. ("Vampiros"). Thereafter, counsel for the plaintiff submitted a letter dated March 19, 2002, to the court stating that plaintiff had settled its claim(s) against Vampiros. In addition, on October 10, 2002, your Honor issued an order granting plaintiffs motion to dismiss this action as to defendants Pichardo and El Despertar. Accordingly, plaintiffs claims against these defendants are not addressed in this report.
Plaintiffs submissions aver that it is entitled to $110,000 from each defendant: $10,000 in statutory damages and $100,000 in enhanced damages. Plaintiff also seeks $1,500 in attorneys' fees for each location at which the Trinidad/Reid Fight was exhibited illegally, and $275 per defendant in costs. None of the defendants filed papers in opposition to plaintiffs submissions.
For the reasons set forth below, I recommend that Kingvision be awarded damages and costs against the defendants in the following amounts: Aponte in the amount of $6,275; Amsterdam Café in the amount of $6,275; Garcia in the amount of $6,275; Buena Vista in the amount of $6,275; Fusion in the amount of $6,275; El Conde in the amount of $6,275; Maguina in the amount of $6,275; J R Café in the amount of $6,275; Reyes in the amount of $6,275; Las Hermanas in the amount of $6,275; Ortiz in the amount of $6,275; Los Marranos in the amount of $6,275; Nacho's in the amount of $6,275; Peralta in the amount of $6,275; and M P Tenares in the amount of $6,275.
II. BACKGROUND AND FACTS
Based on the submissions by plaintiff, the Complaint filed in the instant action — the allegations of which, perforce of the defendants' default, must be accepted as true, except those relating to damages, see Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992) — and this Court's review of the entire court file in this action, the following findings of facts are made:
Kingvision is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 501 Fairway Drive, Deerfield Beach, Florida 33441. First Amended Complaint, ¶ 5, at 9-10. Aponte is an individual. See id., ¶ 6, at 10. Amsterdam Café is a commercial establishment having its principal place of business at 1985 Amsterdam Avenue, New York, New York 10032. See id., ¶ 7, at 10. Garcia is an individual having a principal residence at 268 East 181St Street, Bronx, New York 10457. See id., ¶ 24, at 12. Buena Vista is a commercial establishment having its principal place of business at 2376 Amsterdam Avenue, New York, New York 10033. See id., ¶ 25, at 12. Fusion is a commercial establishment having its principal place of business at 936 Second Avenue, New York, New York 10022. See id., ¶ 28, at 13. El Conde is a commercial establishment having its principal place of business at 4139 Broadway, New York, New York 10033. See id., ¶ 48, at 16. Maguina is an individual having a principal residence at 9 Hurd Avenue, Garnerville, New York 10923, and an officer, director, shareholder and/or principal of J R Café. See id., ¶ 77, at 20. J R Café is a commercial establishment having its principal place of business at 147 Broadway, Haverstraw, New York 10927. See id., ¶ 78, at 20. Reyes is an individual, and an officer, director, shareholder and/or principal of Las Hermanas. See id., ¶ 87, at 21. Las Hermanas is a commercial establishment having its principal place of business at 1846 Jerome Avenue a/k/a 3 East 176th Avenue, Bronx, New York 10453. See id., ¶ 88, at 21. Ortiz is an individual. See id., ¶ 92, at 22. Los Marranos is a commercial establishment having its principal place of business at 1524 Watson Avenue, Bronx, New York 10472. See id., ¶ 93, at 22. Nacho's is a commercial establishment having its principal place of business at 39 Main Street, Haverstraw, New York 10927. See Id., ¶ 104, at 23. Peralta is an individual having a principal residence at 1690 East 174th Street, 2G, Bronx, New York 10472 See id., ¶ 124, at 26. M P Tenares is a commercial establishment having its principal place of business at 501 West 175th Street a/k/a 2316 Amsterdam Avenue, New York, New York 10033. See id., ¶ 125, at 26.
Kingvision, by contract, was granted the exclusive right to distribute, by way of closed circuit television and encrypted satellite signal, the March 3, 2000 transmission of the Trinidad/Reid Fight. See id., ¶ 159, at 31. Under the terms of the contract, plaintiff was entitled to enter into agreements with various business entities in New York State which allowed these entities to exhibit the event publicly to their patrons. See id., ¶ 160, at 31. The cost to Kingvision of obtaining the exclusive right to distribute the event to the relevant venues in New York was substantial. See id., ¶ 161, at 31.
The Complaint alleges that the defendants unlawfully intercepted the television signal of the event and exhibited it at their respective places of business, at the time of the transmission, knowingly, willfully and for the purposes of commercial advantage or private financial gain.See id., ¶ 162, at 31-32. The Complaint alleges further that defendants modified a device, such as a satellite receiver, or used equipment, such as a cable converter box, to intercept plaintiffs broadcast, knowing that such a modified device or piece of equipment was designed primarily to assist the unauthorized decryption of satellite cable programming or direct-to-home satellite services. See id., ¶ 163, 170 at 32-33.
According to plaintiff, after it began to experience an erosion of sales of pay-per-view broadcasts to commercial establishments throughout the United States, and especially in New York, it endeavored to discover the cause of the loss. To this end, plaintiff enlisted licensed private investigators. Plaintiff states that the cause of the erosion in its sales was determined to be the "piracy" of its broadcasts by unauthorized and unlicenced establishments. See Plaintiffs Inquest Memorandum, Exhibit B: Affidavit of Donna K. Westrich, Vice-President of Kingvision.
Plaintiff avers that programming of the type it offers cannot be "mistakenly or innocently intercepted," and identifies various methods by which a "signal pirate" may unlawfully intercept a television signal. See id. These include: (a) the use of a "blackbox," which is purchased for a fee, and, when installed on a cable television line, will allow for the descrambled reception of a pay-per-view broadcast; (b) the purposeful misrepresentation of a commercial establishment as a residential property, making possible the purchase of a pay-per-view broadcast at a reduced rate; (c) the use of an illegal "cable drop" or "splice" from a residence adjacent to a commercial establishment, allowing a television broadcast that was purchased at a residential rate to be exhibited on the premises of the commercial establishment; or (d) the employment of any of the methods described above in connection with a "DSS Satellite System" or a "C-Band Satellite System." Id.
Plaintiff contends that the defendants violated the Communications Act for purposes of commercial advantage or private financial gain, as evidenced by the following considerations:
On the evening of the Trinidad/Reid Fight, private investigators employed by plaintiff observed: (i) ten to twelve patrons at the Amsterdam Café at approximately 10:30 p.m.; (ii) fifteen patrons at Buena Vista at approximately 10:40 p.m.; (iii) eighty patrons at Fusion at approximately 11:55 p.m.; (iv) ten to eleven patrons at El Conde at approximately 11:45 p.m.; (v) thirty patrons at J R Café at approximately 11:30 p.m.; (vi) eight patrons at Las Hermanas at approximately 10:20 p.m.; (vii) twenty-five to thirty patrons at Los Marranos at approximately 10:35 p.m.; (viii) fifty patrons at Nacho's at approximately 11:30 p.m.; and (ix) twelve patrons at M P Tenares at approximately 10:40 p.m. According to the investigators, the patrons in each establishment were watching either pre-event programming or the Trinidad/Reid Fight. See Plaintiffs Inquest Memorandum, Exhibit C.
Plaintiff argues that, given the public interest in the event, the number of patrons at each establishment could have been expected to increase as the evening progressed. See Plaintiffs Inquest Memorandum. Consequently, the defendants could have been expected to receive enhanced revenues from the increased sales to their customers of food and beverages. See id. Plaintiff seeks statutory damages pursuant to 47 U.S.C. § 605 (e) of $110,000 against each defendant, plus attorneys' fees and costs.
III. CONCLUSIONS OF LAW
47 U.S.C. § 553 and 605 both prohibit the unauthorized interception and reception of cable programming services which originate and are delivered via satellite or by other means of over-the-air signal transmission. See Time Warner Cable of New York City v. Barnes, 13 F. Supp.2d 543, 547-48 (S.D.N.Y. 1998) (citing International Cablevision. Inc. v. Sykes and Noel, 75 F.3d 123, 133 [2d Cir. 1996]);Cablevision Systems New York City Corp. v. Lokshin, 980 F. Supp. 107, 112 (E.D.N.Y. 1997).
47 U.S.C. § 553 (a) provides, in pertinent part, that:
No person shall intercept or receive . . . any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be specifically authorized by law.47 U.S.C. § 553 (a)(1).
47 U.S.C. § 605 provides inter alia that:
No person not being authorized by the sender shall intercept any radio communication and divulge or publish the . . . contents . . . of such intercepted communication to any person.47 U.S.C. § 605 (a).
"In contrast to section 553, which by its statutory language applies only to transmissions via cable systems, section 605(a) applies to the interception of cable-borne, as well as over-the-air, pay television where cable-borne transmissions originate as satellite transmissions."Lokshin, 980 F. Supp. at 112 (quoting Sykes, 75 F.3d at 130). Therefore, "when pay television programming is transmitted over both cable and satellite mediums, both statutes apply . . ." Lokshin, 980 F. Supp. at 112 (citing Sykes, 75 F.3d at 130).
Kingvision's pay-per-view programming is sent to Kingvision from orbiting satellites. See Complaint ¶ 159, at 31. Accordingly, Kingvision's pay-per-view programming is protected from unauthorized reception under 47 U.S.C. § 605 (a). See Barnes, 13 F. Supp.2d at 548 (citations omitted).
In New York, commercial establishments were permitted to exhibit the Trinidad/Reid Fight only if they had entered into the relevant license agreement with the plaintiff. None of the defendants are among the commercial establishments that were authorized to exhibit the match on the date in question pursuant to the terms of such an agreement. Therefore, it is reasonable to conclude that the defendants knowingly intercepted plaintiffs transmission of this event and exhibited it at their respective places of business at the time of transmission. Accordingly, plaintiffs submissions establish that defendants violated 47 U.S.C. § 553 (a)(1) and 605(a).
Kingvision possesses "proprietary rights" in the communication which the defendants intercepted, and is thus a "person aggrieved" within the meaning of 47 U.S.C. § 553 (c)(1) and 605(e)(3)(A).
When a court determines that a defendant's conduct has violated both 47 U.S.C. § 553 and 605, a plaintiff may recover damages under only one of those sections. Barnes, 13 F. Supp.2d at 548; American Cablevision of Queens v. McGinn, 817 F. Supp. 317, 320 (E.D.N.Y. 1993). For violations of both sections 553 and 605, an aggrieved cable operator is entitled to elect to recover damages under section 605 in consideration of section 605's higher damages award. Barnes, 13 F. Supp.2d at 548 (citations omitted).
Kingvision has elected to recover statutory damages against the defendants, rather than actual damages. 47 U.S.C. § 605 (e)(3) authorizes the court to award statutory damages in an amount "not less than $1,000.00 or more than $10,000.00, as the court considers just."See 47 U.S.C. § 605 (e)(3)(C)(i)(II). It provides further 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 willfully and for the purposes of commercial advantage or private financial gain. See 47 U.S.C. § 605 (e)(3)(C)(ii).
In this case, plaintiff seeks the statutory maximum of $10,000 in damages against each defendant pursuant to 47 U.S.C. § 605 (e)(3)(C)(i)(II). However, plaintiff has not submitted evidence establishing the amount of the license fee required to broadcast the boxing event legally and, therefore, has failed to establish that it suffered any actual damages due to the defendants' conduct. For this reason, the Court finds that the statutory minimum of $1,000 in damages against each defendant is appropriate. See Kingvision Pay-Per-View, Ltd. v. Rodriguez, No. 02 Civ. 7972, 2003 WL 548891, at *2 (S.D.N.Y. Feb. 25, 2003) (awarding $1,000 in statutory damages in a similar case).
With respect to plaintiffs application for enhanced damages for conduct that is committed willfully and for the purposes of commercial advantage or private financial gain, plaintiffs request should be granted. In order for the defendants to have received the closed-circuit broadcast, they had to have engaged in some deliberate act, such as modifying a device or using decoding equipment. Therefore, the defendant's conduct was willful. Further, while plaintiff did not submit proof that any of the defendants had pirated other events or advertised the fight, its submissions establish that defendants' display of the boxing match was likely to have resulted in an increase in the number of patrons at each establishment, as well as an increase in sales of food and beverages. Accordingly, an additional award of $5,000 in enhanced damages should be assessed against each defendant. See Time Warner Cable of New York City v. Taco Rapido Restaurant, 988 F. Supp. 107, 112 (E.D.N.Y. 1997) (awarding $5,000 in enhanced damages in a similar case); Kingvision Pay-Per-View, Ltd. v. The Body Shop, No. 00 Civ. 1089, 2002 WL 393091, at *4 (S.D.N.Y. Mar. 13, 2002) (awarding $10,000 in enhanced damages); Rodriguez, 2003 WL 548891, at *2 (awarding $1,000 in enhanced damages).
47 U.S.C. § 605 authorizes a court to "direct the recovery of full costs, including the award of reasonable attorneys' fees to an aggrieved party who prevails." See 47 U.S.C. § 605 (e)(3)(B)(iii). In the Second Circuit, a party seeking an award of attorney fees must support that request with contemporaneous time records that show, "for each attorney, the date, the hours expended, and the nature of the work done." New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1154 (2d Cir. 1983). Attorney fee applications that do not contain such supporting data "should normally be disallowed." Id. at 1154.
Plaintiff seeks $1,500 in attorneys' fees for each location at which an unauthorized transmission of the Trinidad/Reid Fight was exhibited. However, plaintiff does not support its request with documentation showing how such attorneys' fees were incurred. Therefore, plaintiffs failure to submit contemporaneous time records or other relevant data in support of its request for attorneys' fees precludes such an award. See The Body Shop, 2002 WL 393091, at *5 (denying award of attorneys' fees where data supporting the fees were not provided).
Plaintiff also seeks to recover $275 per defendant for costs incurred in investigating this matter. This request is reasonable and should be granted.
IV. RECOMMENDATION
For the reasons set forth above, the Court recommends an award to Kingvision of damages and costs against the noted defendants in the following amounts: Aponte in the amount of $6,275; Amsterdam Café in the amount of $6,275; Garcia in the amount of $6,275; Buena Vista in the amount of $6,275; Fusion in the amount of $6,275; El Conde in the amount of $6,275; Maguina in the amount of $6,275; J R Café in the amount of $6,275; Reyes in the amount of $6,275; Las Hermanas in the amount of $6,275; Ortiz in the amount of $6,275; Los Marranos in the amount of $6,275; Nacho's in the amount of $6,275; Peralta in the amount of $6,275; and M P Tenares in the amount of $6,275.
* * *
Plaintiff shall serve defendants Aponte, Amsterdam Café, Garcia, Buena Vista, Fusion, El Conde, Maguina, J R Café, Reyes, Las Hermanas, Ortiz, Los Marranos, Nacho's, Peralta, and M P Tenares with a copy of this Report and Recommendation and shall submit proof of service to the Court.
V. FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636 (b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have ten (10) days from service of the Report to file written objections. See also Fed.R.Civ.P. 6. Such objections, and any responses to objections, shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Richard M. Berman, United States District Judge, 40 Centre Street, Room 201, New York, New York, 10007, and to the chambers of the undersigned, 40 Centre Street, Room 540, New York, New York 10007. Any requests for an extension of time for filing objections must be directed to Judge Berman. FAILURE TO FILE OBJECTIONS WITHIN TEN (10) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See Thomas v. Arn, 474 U.S. 140 (1985); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir. 1992); Wesolek v. Candair Ltd., 838 F.2d 55, 57-59 (2d Cir. 1998); McCarthy v. Manson, 714 F.2d 234, 237-38 (2d Cir. 1983).