Opinion
No. 01 Civ. 7068 (LTS) (THK)
March 4, 2003
MEMORANDUM OPINION AND ORDER
This matter comes before the Court on the unopposed motion of plaintiff Cablevision Systems New York City, Corp. ("Plaintiff") for an order granting it a default judgment against defendant Ronald Scott d/b/a P Tavern ("Defendant"), a commercial establishment with its principal place of business in New York City. Plaintiff brings this action under 47 U.S.C. § 553 and 605, alleging that Defendant violated the federal communications laws through usage of a modified cable converter to receive and publicly display Plaintiff's premium and pay-per-view cable television programming services without authorization from or payment to Plaintiff. Defendant never appeared in this action, and Plaintiff moves for entry of a default judgment against Defendant, seeking statutory damages and reasonable attorney's fees.
The Court has considered thoroughly all submissions related to this motion. For the following reasons, Plaintiff's motion is granted in part, damages and costs are awarded to the extent set forth below, and the motion is denied to the extent it requests injunctive relief.
BACKGROUND
Cablevision is a cable television operator that has been awarded franchises by the City of New York authorizing it to construct, operate and maintain cable television systems in parts of New York City, among them the area in which Defendant's commercial establishment is located. (Carroll Aff., attached to Pl.'s Mot., ¶ 2.) Cablevision offers different types of programming services, for which it charges different monthly rates depending on the level of service. (Id. ¶¶ 3-4.) Cablevision also offers pay-per-view programming, which allows subscribers to purchase individual movies, sporting events or other entertainment for a per-event charge over and above the monthly fee, ranging from $4.95 to $49.95 per selection. Pay-per-view selections run continuously over a 24-hour period. (Id. ¶ 5.) Cablevision includes in its service to each subscriber a converter-decoder which Cablevision programs so that each subscriber receives only the service that he or she purchased and is authorized to receive. (Id. ¶ 8.)
The aggregate value of the pay-per-view events offered over a typical month, assuming that each event is viewed once, is approximately $400. (Carroll Aff. ¶ 5.)
Plaintiff's premium and pay-per-view programming are sent to Plaintiff via over-the-air transmissions from orbiting satellites and local radio towers. (Compl. ¶ 11.) The signals are then retransmitted over Plaintiff's cable television system. (Carroll Aff. ¶¶ 7-8.) To protect its programming from theft and unauthorized use, Cablevision encrypts or "scrambles" the signals to all programming. When scrambled, programming is distorted and not viewable. (Id. ¶ 9.) Cablevision separately programs each of the converters it gives to its subscribers so that the converter only descrambles the channels that the subscriber has purchased. (Id. ¶ 10.) Cablevision uses scrambling as its principal measure of security.
Each converter features technology known as "addressability," enabling the cable operator's central computer to communicate with the descrambling and computer circuitry in each converter. (Carroll Aff. ¶ 11.) Through the addressability technology, the cable operator may send signal commands to the converter to descramble and to resume scrambling particular programs that the subscriber purchases through the pay-per-view service. (Id. ¶¶ 11-12.)
Defendant first became a Cablevision subscriber on October 6, 2000, subscribing to a "Commercial Optimum Sports" level of programming. (Id. ¶ 16.) On December 16, 2000, Defendant was arrested on certain criminal charges, including Criminal Possession of a Forged Instrument, and law enforcement representatives found a modified cable converter in Defendant's possession at his commercial establishment upon the execution of a search warrant. (Id. ¶ 15.) Plaintiff tested the cable converter and found that it had been modified to obtain all premium and pay-per-view channels. (Id.) Defendant had not paid for, and was not authorized to receive, such service. (Id. ¶ 19.)
PROCEDURAL HISTORY
The complaint in this action was filed on July 31, 2001. The record reflects that, on October 12, 2001, Plaintiff filed an affidavit of service attesting to service of the Summons and Complaint upon Defendant by leaving a copy at P Tavern with Fred Brown, an employee of Defendant, on August 21, 2001. On the same day, Plaintiff also filed an affidavit of service attesting to service of the Summons and Complaint upon Defendant by leaving a copy at his usual place of residence with James Scott, Defendant's brother, on August 21, 2001, and thereafter mailing a copy to Defendant's residence. Defendant did not file an answer. After Plaintiff sought permission to move for a default judgment, the Court, on November 19, 2001, authorized the motion and ordered that Plaintiff file evidentiary material it would have proffered to meet its burden of proof on its direct case had a trial been held in this action. A certificate of default was issued by the Clerk of Court on February 15, 2002.
The instant motion was filed on February 22, 2002. No opposition papers were received. Defendant did not appear at either of the pre-trial conferences held in this action.
DISCUSSION
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 judgment 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 manner 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). 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). "[T]he court may find a default to have been willful where the conduct of counsel or the litigant was egregious and was not satisfactorily explained." Id. at 738.
In light of all the circumstances previously outlined, the Court finds that Defendant, having failed to respond in any way to the Summons and Complaint or otherwise make any appearance in this action, and having failed to provide any explanation for the 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.
In addition to documenting the proper service of its detailed Complaint, Plaintiff has, in response to the Court's November 19, 2001 order, served on Defendant and submitted to the Court affidavits setting forth evidence it would have presented on its affirmative case had the matter gone to trial. This evidence includes documentation relating to Defendant's possession of the modified cable converter that could only be used for illegally receiving the cable programming, and Charles Carroll's Affidavit, attesting to the exclusive nature of Plaintiff's programming, the deliberate measures necessary to display the programming in Defendant's commercial establishment, and the cost of the cable broadcasts to authorized users. 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 the Defendant. Under these circumstances, denial of this motion would be unfairly prejudicial to Plaintiff.
Cablevision's Claim for Damages
Plaintiff's rights are protected by 47 U.S.C. § 553, concerning cable system communications, and 47 U.S.C. § 605, concerning radio communications. Defendant's unauthorized interception of Plaintiff's cable television programming, which originated as satellite-delivered radio communications, was in violation of Sections 553 and 605. Although Plaintiff seeks to recover damages pursuant to both statutes, it is well established that, when a defendant's conduct violates both Sections 553 and 605, a plaintiff may only recover damages pursuant to one of them. Time Warner Cable of New York City v. Barbosa, 2001 WL 118608, at *5 (S.D.N.Y. 2001). See also Int'l Cablevision, Inc. v. Sykes, 75 F.3d 123, 129 (2d Cir. 1996). In such cases the plaintiff is entitled to damages under Section 605, which allows for more generous relief. See, for example, Barbosa, 2001 WL 118608, at *5; Time Warner Cable of New York City v. Fland, 1999 WL 1489144, at *1 (S.D.N.Y. 1999).
Section 605(a) 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 communication to any person." 47 U.S.C.A. § 605(a) (West 2001). Subsection (e)(3) of the statute provides a civil cause of action for the aggrieved party, with remedies including injunction, damages, costs and attorneys' fees. Subsection (e)(3)(C) provides that the aggrieved party may elect to recover either 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). In the present case the Court will award statutory damages, as Plaintiff has proffered no evidence as to how many patrons attended Defendant's commercial establishment to view broadcasts of the programs and events through the unauthorized use of the modified cable converter. Subsection (e)(3)(C) 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 willfully and for the purposes of commercial advantage or private financial gain.
Based on the evidence presented to the Court, the Court finds that Defendant's interceptions of the broadcasts were willful. Further, the evidence supports the reasonable inference that Defendant's use of the unauthorized modified cable converter, in Defendant's commercial premises, was for purposes of private financial gain. Thus, as noted above, the Court has discretion to enhance the statutory amount under Section 605. See Cablevision v. Faschitti, No. 94 Civ. 6830, 1996 WL 48689 at *2 (S.D.N.Y. 1996). Additionally, in light of the nature of the violations documented in this action, "a higher award is necessary to deter future violations of the communications law." Id. at *3. The Court finds that adding to the statutory minimum damages of $1,000 the sum of $2,400 — three times the standard cost of the premium and pay-per-view services accessible through the box, for the approximately two-month period from the time Defendant became a Cablevision subscriber through the seizure of the converter — is a sufficient deterrent to future violations. Therefore, the Court awards Plaintiff enhanced statutory damages of $3,400.
Plaintiff seeks enhanced damages under Section 553. However, as stated above, the Court cannot grant recovery under both Sections 553 and 605. Accordingly, while Plaintiff only specifically sought enhanced damages under Section 553, as the Court is granting recovery under Section 605, it is granting enhanced damages for willful violation under Section 605(e)(3)(C)(ii).
Reasonable Attorney's Fees
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). The Second Circuit Court of Appeals has held, however, that a party seeking an award of attorney's fees must support its request by contemporaneous time records specifying "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, 1148, 1154 (2d Cir. 1983). See also Kingvision v. Jasper Grocery, 152 F. Supp.2d 438, 443 (S.D.N.Y. 2001) ("[f]ailure to support a fee application with [such] records generally results in denial of any award."). In the present case, Plaintiff seeks $1,611.50 in attorney's fees for 11.6 hours of work. This request is supported by the Affidavit of Michael D. Cassell, and time sheets documenting 9.9 hours of attorney and paralegal time at an aggregate value, based on the hourly rates attested to in the affidavit, of $1467.00. (Exs. E F to Pl.'s Mot.). The Court finds the contemporaneous time sheets to be accurate and reasonable and awards Plaintiff $1,467.00 in attorneys' fees. Plaintiff also requests $180.00 in costs, $150.00 for the filing fee and $30.00 for service of process. The Court finds this request to be reasonable, and awards $180.00 in costs.
Plaintiff's Proposed Judgment includes an order permanently enjoining Defendant from intercepting or attempting to intercept Plaintiff's cable programming without authorization. Plaintiff's Memorandum of Law and the Affidavit of Charles Carroll in support of the instant motion, however, do not mention or address any request for injunctive relief. Because the modified cable converter at issue is no longer in Defendant's possession and Plaintiff has proffered no evidence of ongoing behavior constituting a threat of irreparable harm, Plaintiff's motion is denied to the extent it requests injunctive relief.
CONCLUSION
For the foregoing reasons, Plaintiff is entitled to judgment against Defendant Brian Scott d/b/a P Tavern for $5,047.00. The Clerk of Court shall enter judgment accordingly.
IT IS SO ORDERED.