REPORT AND RECOMMENDATION

JAMES FRANCIS, Magistrate Judge

This is an action brought pursuant to the Cable Communications Policy Act of 1984 ("Cable Act"), 47 U.S.C. § 553 and 605, seeking relief for the unauthorized interception and commercial exhibition of closed-circuit television programming. The defendants, Chuleria's Den, Inc. d/b/a Chuleria's Den ("Chuleria's Den") and its principal, Juan Estaban, failed to answer or move with respect to the complaint. After a default judgment was entered, the case was referred to me for an inquest on damages. A hearing was held on July 17, 2003, and although notice was sent to the defendants, no one appeared on their behalf. Accordingly, the following findings are based on the submissions of the plaintiff. Background

On June 8, 2002, Lennox Lewis and Mike Tyson were contestants in a professional prizefight. (Complaint ("Compl."), ¶ 22; Tr. at 4). The plaintiff, Garden City Boxing Club, Inc. ("Garden City"), was granted the right to distribute the closed-circuit telecast of this fight and all undercard bouts. (Compl., ¶ 22; Tr. at 4). It sublicensed the right to exhibit the telecast to a variety of commercial establishments in New York. (Compl., 55 23, 24; Tr. at 4).

In order to ensure limited access to the programming, Garden City coded or scrambled its transmission of the event. (Compl., ¶ 22). The original telecast was transmitted by a satellite uplink, then re-transmitted in scrambled form to cable systems and satellite companies, presumably including Garden City. (Compl., ¶ 22). Garden City distributed the transmission to various commercial entities that paid it the appropriate fee. (Compl. ¶¶ 23, 24; Tr. at 4).

In this case, however, Chuleria's Den received and exhibited the event without paying a fee to Garden City. (Compl., ¶¶ 25, 26, 39; Tr. at 7). On the night of the event, Garden City authorized independent investigators to visit commercial establishments suspected of exhibiting the event without paying the required fee. (Affidavit of Joseph Gagliardi dated October 17, 2002 ("Gagliardi Aff."), attached to Plaintiff's Proposed Findings of Fact and Conclusion of Law ("Plaintiff's Proposed Findings"), ¶¶ 7-8). One investigator, Bruce Ford, visited Chuleria's Den at approximately 11:03 p.m. (Affidavit of Bruce W. Ford dated June 18, 2002 ("Ford Aff."), attached to Plaintiff's Proposed Findings). Chuleria's Den is a barber shop with a capacity of about 25, and the investigator observed about 23 patrons there on the night of the telecast. (Ford Aff.). Video clips of past Lewis/Tyson fights were being shown on a television in the rear. (Ford Aff.). Upon learning of the unauthorized use of the telecast, Garden City filed the instant action.

Discussion

A. Jurisdiction

As this case arises under federal law, this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331. In addition, the Cable Act itself provides for jurisdiction. 47 U.S.C. § 605(e)(3)(A). There is personal jurisdiction over the defendants in this forum both because they are doing business in New York and because the plaintiff's claims arise from the defendants' transaction of business here. N.Y. C.P.L.R. §§ 301 and 302.

B. Liability

All of a plaintiff's factual allegations, except those relating to damages, must be accepted as true where, as here, the defendants default. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997); Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Time Warner Cable of New York City v. Barnes, 13 F. Supp.2d 543, 547 (S.D.N.Y. 1998). In this case, the allegations of the complaint establish a violation of the Cable Act by Chuleria's Den.

Section 605 of the Cable Act provides in pertinent part that "[n]o 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." 47 U.S.C. § 605(a). This section applies to the transmissions of a television signal by radio, whether or not the signal is subsequently carried by coaxial cable. See International Cablevision, Inc. v. Sykes, 75 F.3d 123, 132 (2d Cir. 1996).

Section 553 of the Cable Act addresses the unauthorized interception of cable communications. It states in 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 by a cable operator or as may otherwise be specifically authorized by law." 47 U.S.C. § 553(a)(1).

In this case, Chuleria's Den engaged in the unauthorized interception of both radio and cable communications. While Garden City does not provide much detail concerning the technology it used to transmit the Lewis/Tyson telecast, it states that the broadcast was transmitted by satellite and microwave signals, indicating that it originated with a radio transmission. (Compl., ¶ 26). Garden City also alleges that the defendants intercepted the broadcast when it was distributed and shown by cable systems. (Compl., ¶ 41). Only those entities that paid a fee to Garden City were granted the right to exhibit the broadcast. (Compl., ¶ 23-24.) As Chuleria's Den did not pay the requisite fee to Garden City, it was able to exhibit the program only by intercepting it over radio and cable communications. Chuleria's Den is therefore liable for violating §§ 605(a) and 553(a)(1) of the Cable Act.

Garden City also alleges that Chuleria's Den violated § 605(e)(4) of the Cable Act, which states in part that "[a]ny person who manufactures, assembles, modifies, imports, exports, sells, or distributes any electronic, mechanical, or other device or equipment, knowing or having reason to know that the device or equipment is primarily of assistance in the unauthorized decryption of satellite cable programming, or direct-to-home satellite services" shall be fined for violating this section. While it is possible that Chuleria's Den "modified" a device intended for decryption, the complaint does not present any factual allegations concerning the defendants' actions in this regard. The complaint also states that the defendants "utilized equipment" intended for decryption, an act that is not prohibited by § 605(e)(4). Therefore, Garden City has not established a violation of § 605(e)(4). This is of little consequence, however, since full relief is available for a violation of § 605(a).

However, Garden City's failure to allege any illegal conduct by Mr. Estaban is significant. The complaint alleges only that "[u]pon information and belief, the defendant, Juan Estaban, resides in the State of New York." (Compl., ¶ 11). It states that Chuleria's Den is "a business entity, the exact nature of which is unknown," and Mr. Estaban's role in the business is not specified. (Compl., ¶ 12). In a corporation, officers and directors are not generally liable for tortious acts of the corporation unless they participate in or have knowledge of such acts. See Cohen v. Koenig, 25 F.3d 1168, 1173 (2d Cir. 1994); Buy This, Inc. v. MCI Worldcom Communications, Inc., 209 F. Supp.2d 334, 342 (S.D.N.Y. 2002); Isanaka v. Spectrum Technologies USA Inc., 131 F. Supp.2d 353, 361 (N.D.N.Y 2001). There is nothing in the language of the Cable Act indicating that the Act was intended to override this general principle and impose strict liability on corporate officers and directors. In the absence of allegations asserting Mr. Estaban's ownership or control over Chuleria's Den or his personal involvement as a corporate officer or director in the illegal acts of the business, he cannot be found individually liable for violating the Cable Act.

C. Damages

In its complaint, Garden City sought an award of statutory damages pursuant to both § 553 and § 605, but acknowledges that it can recover only under one or the other. (Plaintiff's Proposed Findings at 6-7). See 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); American Cablevision of Queens v. McGinn, 817 F. Supp. 317, 320 (E.D.N.Y. 1993). Garden City has elected to seek statutory damages of $10,000 against each of the defendants pursuant to § 605(a), with an enhancement of $100,000 under § 605(e)(3)(C) (ii) based on the willfulness of the defendants' acts, plus litigation costs, for a total of $110,252.50. (Plaintiff's Proposed Findings at 6-7; Affidavit of Julie Cohen Lonstein dated March 6, 2003, attached to Plaintiff's Proposed Findings as Exh. A ("Lonstein Aff.") ¶ 31).

While there should be some proportionality between the loss suffered and the amount of statutory damages, the calculation should be generous enough to ensure that the plaintiff is fully compensated. In some cases courts have tried to estimate the profits obtained by the defendants or the amount of the licensing fee that the plaintiff was deprived of. See Time Warner Cable of New York City v. Googies Luncheonette, Inc., 77 F. Supp.2d 485, 490 (S.D.N.Y. 1999) (awarding damages of $50 per patron); Time Warner Cable of New York City v. Taco Rapido Restaurant, 988 F. Supp. 107, 111 (E.D.N.Y. 1997) (same); Cablevision Systems Corp. v. 45 Midland Enterprises, Inc., 858 F. Supp. 42, 45 (S.D.N.Y. 1994) (same). Other courts have awarded a flat sum for each violation. See, e.g., Kinqvision Pay-Per-View Limited Corp. v. New Paradise Restaurant, No. 99 Civ. 10020, 2000 WL 378053, at *2 (S.D.N.Y. April 11, 2000) (awarding a total of $20,000); Kingvision Pay-Per-View Limited Corp. v. Las Cazuelas Mexican Restaurant, No. 99 Civ. 10041, 2000 WL 264004, at *3 (S.D.N.Y. March 9, 2000) (awarding $12,500).

It would not be fair to Garden City to limit the award to the amount of its licensing fee, which would be equal to $20.00 times the 25-person capacity of Chuleria's Den (or $500.00). (Tr. at 6). Nor would it be reasonable to limit the plaintiff's recovery based on the absence of an entrance fee, as Chuleria's Den undoubtedly benefitted financially by offering the Lewis/Tyson fight as an added attraction to customers. Both of these approaches would undercompensate the plaintiff because the availability of unauthorized access to the program reduces demand and depresses the prices that Garden City can charge for sublicenses. See Cablevision Systems New York City Corp., 1996 WL 48689, at *2.

In this case, an award of $5,000 against Chuleria's Den is warranted. This figure well exceeds the probable licensing fee, and it is far more than the minimal amount of added revenues that Chuleria's Den likely received by exhibiting the Lewis/Tyson fight. (Ford Aff. (identifying establishment as barber shop); Tr. at 13). On the other hand, it represents a recognition that maximum statutory damages should be reserved for cases where there is evidence of more substantial injury to the plaintiff or profit by the defendant.

Garden City is entitled to a further enhancement of the damage award because the violation was willful and carried out with the purpose of reaping commercial profits. In order for Chuleria's Den to access the telecast, it would have been necessary to use an unauthorized decoder, to make misrepresentations identifying Chuleria's Den as a residential customer, or to illegally divert cable service or satellite signals into Chuleria's Den. (Gagliardi Aff., ¶ 9 misidentified in Aff. as ¶ 5; Tr. at 8). The illegality of any of these actions would have been apparent to the perpetrator. Moreover, the exhibition of the fight undoubtedly generated commercial profits for Chuleria's Den. Under these circumstances, enhanced damages of $5,000 are appropriate. See Home Box Office v. Champs of New Haven, Inc., 837 F. Supp. 480, 484 (D. Conn. 1993).

Finally, the plaintiff is entitled to recovery of costs under 47 U.S.C. § 605 (e)(3)(B) (iii). In this case Garden City has substantiated costs of $252.50. While an award of attorneys' fees is also available for the prevailing party, the plaintiff has made no such application here. Conclusion

For the reasons set forth above I recommend that judgment be entered in favor of Garden City Boxing, Inc. and against Chuleria's Den, Inc. d/b/a Chuleria's Den in the amount of $5,000 in statutory damages, $5,000 in enhanced damages, and $252.50 in costs, for a total of $10,252.50. Pursuant to 28 U.S.C. § 636(b)(1) and Rules 72, 6(a), and 6(e) of the Federal Rules of Civil Procedure, the parties shall have ten (10) days from this date to file written objections to this Report and Recommendation. Such objections shall be filed with the Clerk of the Court, with extra copies delivered to the chambers of the Honorable Gerard E. Lynch, Room 803, 40 Centre Street, New York, New York 10007, and to the chambers of the undersigned, Room 1960, 500 Pearl Street, New York, New York 10007. Failure to file timely objections will preclude appellate review.