Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-02457/USCOURTS-azd-2_10-cv-02457-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed Question: Fed Communications Act of 1934

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Joe Hand Promotions, Inc., 

Plaintiff, 

vs.

James P. Kostopoulos, et al., 

Defendants. 

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No. CV-10-02457-PHX-NVW

ORDER

Before the Court is Plaintiff’s Application for Default Judgment by the Court (Doc.

17), which will be granted in the amount of $15,000 for the reasons stated below. 

I. Background

On November 12, 2010, Plaintiff filed the instant action against Defendants, alleging

violations of 47 U.S.C. §§ 553 and 605, and conversion. Plaintiff is an international

distributor of sports and entertainment programming. Plaintiff purchased and retained the

commercial exhibition licensing rights to “Ultimate Fighting Championship 91: Couture v.

Lesnar,” the program at issue here. Plaintiff marketed the rights to sublicense this fight to

its commercial customers. Plaintiff alleges that Defendants intentionally and unlawfully

intercepted, received, and exhibited the fight via closed-circuit television on November 15,

2008 at Vertucci’s Rockin’ Italian Sports Grill, Defendants’ establishment. Plaintiff

contends that piracy of its programming such as this costs the company, its customers and

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the community millions of dollars annually, and believes that such piracy is rampant because

of the perceived lack of consequences for unlawfully intercepting and exhibiting such

programs. Plaintiff has accordingly requested that the Court award the maximum statutory

damages, including enhanced damages for willful violations and damages for conversion.

Defendants were served with the summons and complaint on February 2, 2011 (Docs.

11, 12). Defendants have not answered the complaint or otherwise appeared in this action.

Plaintiff applied for entry of default against Defendants pursuant to Fed. R. Civ. P. 55(a),

which was entered by the Clerk of the Court on March 7, 2011 (Doc. 16). Plaintiff filed the

pending application for default judgment on April 8, 2011 (Doc. 17), along with an affidavit

in support of its motion (Doc. 18). Plaintiff requests that the Court enter default judgment

against Defendants in the amount of $110,875.00. Defendants have not responded to the

application for default judgment.

II. Legal Standard

Under Fed. R. Civ. P. 55(b)(2), the Court has discretion regarding the entry of default

judgment. The Court may consider the following factors when determining whether the

entry of default judgment is appropriate: (1) the possibility of prejudice to the plaintiff; (2)

the merits of plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) the sum

of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6)

whether the default was due to excusable neglect; and (7) the strong policy underlying the

Federal Rules of Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d

1470, 1471-1472 (9th Cir. 1986). “Upon default, the well-pleaded allegations of the

complaint relating to liability are taken as true.” TeleVideo Systems, Inc. v. Heidenthal, 826

F.2d 915, 917-18 (9th Cir. 1987). 

A. 47 U.S.C. § 553

Unauthorized reception of cable service is governed by 47 U.S.C. § 553, which

provides that “no 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

by a cable operator or as may otherwise be specifically authorized by law.” 47 U.S.C. §

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553(a)(1). An aggrieved party under § 533 may recover statutory damages of “not less than

$250 or more than $10,000 as the court considers just” for all violations. 47 U.S.C. §

553(c)(3)(A)(ii). However, in any case in which the Court finds that “the violation was

committed willfully and for purposes of commercial advantage or private financial gain,” the

Court may increase the award of damages by up to $50,000. 47 U.S.C. § 553(c)(3)(B).

B. 47 U.S.C. § 605

47 U.S.C. § 605, which address unauthorized publication or use of wire or radio

communications, states in relevant part:

(a) ... no 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, (1) 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. No person having received any intercepted

radio communication or having become acquainted with the contents, substance,

purport, effect, or meaning of such communication (or any part thereof) knowing that

such communication was intercepted, shall divulge or publish the existence, contents,

substance, purport, effect, or meaning of such communication (or any part thereof) or

use such communication (or any information therein contained) for his own benefit

or for the benefit of another not entitled thereto.

The aggrieved party under 47 U.S.C. § 605 is authorized to obtain statutory damages of “not

less than $1,000 or more than $10,000, as the court considers just” for each violation. 47

U.S.C. § 605(e)(3)(C)(i)(II). The Court may also award enhanced damages of up to $100,000

for each violation if it finds the violation was willfully committed for commercial advantage

or private financial gain. 47 U.S.C. § 605(e)(3)(C)(ii).

III. Analysis

Plaintiff has elected to seek statutory damages under § 605(e)(3)(C)(i)(II), which

permits recovery of between $1,000 and $10,000 per violation. To determine an appropriate

award, the Court balances the need to deter future illegal conduct against the harm that will

result to Defendants’ business by assessing significant damages. Kingvision Pay-Per-View

v. Lake Alice Bar, 168 F.3d 347, 360 (9th Cir. 2009). Although Plaintiff has not alleged the

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exact means of transmission of the broadcast in this case, and it is thus unclear whether an

award of damages is pursuant to § 553 or § 605, an award here is appropriate under either

standard because the Court’s award of statutory damages falls within the limits of both

sections. See J & J Sports Prod., Inc. v. Hernandez, No. CV09-3389-GEB-KJN, 2010 WL

1980186, * 4 (E.D. Cal. 2010).

In this case, Vertucci’s Rockin’ Italian Sports Grill is a commercial establishment with

a maximum capacity of 50-60 people. According to Plaintiff’s investigator, on November

15, 2008, the establishment had six 46" televisions broadcasting the fight. Plaintiff’s

investigator conducted three head counts while he was present, noting the total number of

patrons at the establishment was, at various times, 80, 82, or 85. There was no cover charge

to enter the establishment, but there was a flyer on the door advertising the fight and food and

drink specials. If Defendants had purchased the rights to show the broadcast, the commercial

sublicense fee would have been $875. Because broadcasting the fight in these circumstances

is a clear violation of either § 553 or § 605, the Court will award $5,000 in statutory

damages.

Plaintiff has also requested $100,000 for enhanced damages. By Defendants’ default,

they have admitted to willfully violating the referenced statutes for purposes of commercial

advantage. In determining the appropriate amount of enhanced damages to award, “Courts

generally consider factors such as repeat violations, substantial unlawful monetary gains,

significant actual damages to plaintiff, advertising, cover charges, or charging premium menu

and drink prices . . . [but some] courts find the mere unauthorized showing of a program

sufficient to award enhanced damages because given the low probability of accidentally

showing it, it must have been done willfully and for profit.” J & J Sports Prods., Inc. v.

Miramontes, No. CV10-2345-PHX-FJM, 2011 WL 892350, *2 (D. Ariz. 2011) (internal

citations omitted).

Here, there was a relatively significant number of patrons viewing the fight, the fight

was broadcast on six large televisions, and there is evidence of at least limited advertising

of the event. However, there was no cover charge for the event, and no evidence of prior

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violations or substantial unlawful monetary gains by Defendants. While the Court agrees

that Defendants acted wilfully and that enhanced damages are appropriate, the requested

$100,000 is excessive. Considering the aggravating factors present here, the Court concludes

that $10,000 is an appropriate award of enhanced damages to sufficiently deter future

violations. See, e.g., Joe Hand Promotions, Inc. V. Tidmarsh, No. CV09-097-LJO-GSA,

2009 WL 1845090 (E.D. Cal. 2009) (awarding $10,000 in enhanced damages where 50-

person capacity establishment unlawfully broadcast event on one television).

Finally, Plaintiff has also requested $875 for actual damages as the amount it would

have made had Defendants lawfully paid for the right to show the program. However, the

statutory damages awarded sufficiently compensate Plaintiff for its loss. No additional

damages for conversion will be assessed.

IT IS THEREFORE ORDERED that Plaintiff’s Application for Default Judgment by

the Court (Doc. 17) is granted in the amount of $15,000. The Clerk is directed to enter

judgment for Plaintiff and against Defendants in the amount of $15,000.

DATED this 2nd day of May, 2011.

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