Opinion
01-CV-5223(RR)(JMA).
February 8, 2002
RICHARD A. KLASS, ESQ., BROOKLYN, NEW YORK, ATTORNEY FOR PLAINTIFF.
ROOPNARIAN RAMSARRAN, BROOKLYN, NEW YORK.
Report and Recommendation
This matter was referred to the undersigned by the Honorable Reena Raggi for report and recommendation on plaintiffs application for damages and attorney fees against defaulting defendants Roopnarain Ramsarran, individually and d/b/a Mix Flavor Fulton Street Bar. For the reasons contained herein, I respectfully recommend that the plaintiff be awarded $15,850.00.
FACTUAL BACKGROUND
Plaintiff, Entertainment By JJ, Inc. ("Entertainment" or "plaintiff'), is a franchised cable television operator that markets and licenses the commercial viewing of boxing events on a pay-per-view basis. Entertainment had the New York territorial rights to the April 7, 2001 boxing match between Prince Naseem Hamed and Marco Antonio Barrera, including preliminary bouts, broadcast from the MGM Grand in Las Vegas, Nevada. The license allowed Entertainment to exhibit the fight to closed-circuit locations such as theaters, arenas, bars, clubs, lounges and restaurants. Entertainment paid a substantial fee for the exclusive rights to telecast the program throughout closed-circuit locations in New York and marketed the sub-licensing of the broadcast in New York State. Various commercial establishments within New York paid substantial fees to plaintiff in exchange for the right to view and transmit the event to their patrons.
On April 7, 2001, without authorization, the defendants intercepted and received the signal for the boxing event. The defendants then transmitted the event to patrons within their commercial establishment. With respect to the fight viewing, an investigator for the plaintiff found that eighteen patrons were present at the Mix Flavor Fulton Street Bar.
Plaintiff filed a summons and complaint against defendants on August 6, 2001. Defendants were served on August 18, 2001. A Notation of Default was entered against these defendants was entered on November 27, 2001.
DISCUSSION
A. Damages
Plaintiff seeks damages for defendants' violations of 47 U.S.C. § 553(a)(1) and 605(a) (2000). Section 553 prohibits persons from intercepting or receiving "any communications service offered over a cable system, unless specifically authorized to do so . . ." Id. § 553(a)(1). Section 605 proscribes the unauthorized interception and publication of any "radio communication." Id. § 605(a).
Defendants' default is deemed an admission of the use of an unauthorized device to intercept decoded and descrambled cable transmissions. Greyhound Exhibit group, Inc. v. E.L.U.L. Realty, 973 F.2d 155, 158 (2d Cir. 1992), cert. denied, 506 U.S. 1080 (1993); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981); see also Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997) (complaint's allegations deemed true after default but not those relating to damages). Defendants have thus admitted to violating both sections 553 and 605. Plaintiff, however, incorrectly argues that it is entitled to recover damages under both statutes. Plaintiff is only entitled to recover under the damages provisions of section 605, as "radio communications" are involved and double recovery is to be avoided. See International Cablevision, Inc. v. Sykes, 75 F.3d 123, 131 n. 5 (2d Cir.), cent denied sub nom. Noel v. International Cablevision, 519 U.S. 929 (1996) (noting that if the signal that was intercepted was not radio-originated, then section 605 does not apply). Section 605 states that where a plaintiff is unable to provide evidence as to the extent of the violation, the plaintiff is allowed to recover statutory damages instead of actual damages. See 47 U.S.C. § 605(e)(3)(C)(i). Due to defendants' default, plaintiff claims that it has been unable to ascertain the exact extent of defendants' violations. Therefore, plaintiff has elected to recover statutory damages.
Nowhere in Entertainment's submissions to the court does it indicate that a radio transmission occurred here. In any event, a plaintiff is entitled to all reasonable inferences that can be made from the evidence it proffers to the court. See Artect, 653 F.2d at 65. I think it a reasonable inference that a radio signal was intercepted here as this case involves pay per view events that took place in Las Vegas, Nevada and were broadcast throughout the United States.
The range of statutory damages for a violation of section 605(a) is $1,000 through $10,000. Section 605 leaves it within the discretion of the court to determine the violation and assess damages for each respective violation. Id. § 605(e)(3)(C)(i)(II). The statute does not clearly define "violation"; instead it is up to the court to decide which acts constitute a single violation. In cases such as this where only one specific instance of unauthorized reception and displaying of programming have been observed, it is difficult to assess a precise figure.
When assessing damages under section 605, a court employing its discretion, may chose one of two routes. Some courts have resolved these dilemmas by employing a formula that multiplies the number of patrons who were present at the time the unauthorized programming is known to have occurred by a dollar amount, typically the customary charge for the pay-per-view event being shown. See, e.g., Time Warner Cable of New York City v. Googies Luncheonette, Inc., 77 F. Supp.2d 485, 489 (S.D.N.Y. 1999); Time Warner Cable of New York City v. Taco Rapido Restaurant, 988 F. Supp. 107, 111 (E.D.N.Y. 1997); Cablevision Systems Corp. v. 45 Midland Enterprises, 858 F. Supp. 42, 45 (S.D.N.Y. 1994). In other cases, where the exact number of patrons who observed the unauthorized programming is unknown, courts have imposed a damages amount based on what the "court considers just." Kingvision Pay-Per-View, Ltd v. Scott E's Pub, Inc., 146 F. Supp.2d 955 (E.D. Wis. 2001). See, e.g., id. (awarding $5,250 in statutory damages); Joe Hand Promotions v. Burg's Lounge, 955 F. Supp. 42 (E.D. Pa. 1997) (awarding $12,000.00 in statutory damages); Home Box Office v. Champs of New Haven, Inc., 837 F. Supp. 480, 484 (D. Ct. 1993) (awarding $10,000.00 in statutory damages).
Other factors to be considered in determining the amount of a plaintiffs damages could include "the pecuniary loss sustained by the victim as a result of the offense, the financial resources of the defendant, . . ., the financial needs and earning ability of the defendant.., as well as the burden that a damage award would impose on the defendant relative to the burden alternative relief would impose." Cablevision Systems Corp. v. De Palma, No. CV-87-3528 (JLC), 1989 WL 8165, at *6 (quoting Cablevision Systems Development Co. v. Cohen, 84-CV-1155, slip op at 4-5 (E.D.N.Y May 20, 1988) (interpreting 47 U.S.C. § 553)).
Based on the foregoing considerations and the facts of this case, I respectfully recommend that Entertainment be awarded $5,000 in statutory damages for the violation.
Additionally, plaintiff seeks an increased award under 47 U.S.C. § 605(e)(3)(C)(ii), which allows for an increase in damages if the violation was committed willfully and for commercial advantage or private financial gain. 47 U.S.C. § 605(e)(3)(C)(ii). According to the Supreme Court, willfulness is defined as "disregard for the governing statute and an indifference for its requirements." Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 126-27 (1985). Courts hold that although this section does not apply to individuals who intercept decoded cable signals for private viewing, the section does apply to persons or entities who operate commercial establishments such as bars, taverns and restaurants that display the unauthorized programming to its patrons, and therefore, have increased the damage award. See, e.g., Googies Luncheonette, 77 F. Supp.2d at 490 (increasing award against one defendant by $12,000.00); Taco Rapido Restaurant, 988 F. Supp. at 111 (increasing award by $5,000.00). These facts are present in this case. See Googies Luncheonette, 77 F. Supp. 2d at 490 ("Signals do not descramble spontaneously, nor do television sets connect themselves to cable distribution systems."). Therefore, I recommend that the damage award be increased by $10,000 for willfully violating the Communications Act. This penalty is fair and reasonable. The award takes into account the free, unauthorized services defendants received, and the commercial gain accrued by defendants as well as the need to punish the defendants and deter future theft of service.
B. Attorney Fees and Costs
Pursuant to section 605(e)(3)(B)(iii), plaintiff is entitled to reasonable attorney fees and costs. 47 U.S.C. § 605(e)(3)(B)(iii). As such, plaintiff requests that the court award a total of $1,975.00 in attorney fees. Under the lodestar method a fee is arrived at by taking "the number of hours reasonably expended on the litigation [and multiplying that figure] by a reasonable hourly rate" Hensley v. Eckerhart, 461 U.S. 424, 434 (1940); see also Chambless v. Masters, Mates Pilots Pension Plan, 885 F.2d 1053, 1058-59 (2d Cir. 1989), cert. denied, 496 U.S. 905 (1990). Reasonable hourly rates are determined by reference to "the prevailing marketplace rates in the community for similar services by lawyers of reasonably comparable skill, experience and reputation." Cruz v. Local Union No. 3, 34F.3d 1148, 1159 (2d Cir. 1994).
Plaintiffs Affidavit in Support of Request for Attorney's Fees indicates that Richard Klass, the attorney providing services in connection with this proceeding, expended a total of 4.9 hours throughout the course of the case, with an "anticipated" additional 3.0 hours of work. Although Mr. Klass submits time records to substantiate his fee request, see New York Ass'n for Retarded Children v. Casey, 711 F.2d 1136, 1147-48 (2d Cir. 1983), I find that the total number of hours expended is excessive. Mr. Klass claims that he spent a total of 1.40 hours drafting the Memorandum of Law and Affidavit in Support and Order to Show Cause. I find this hard to believe. The memorandum of law submitted consists of the same "copy and paste job" that numerous other law firms that do this type of work also submit to this court. See, e.g., Entertainment By JJ, Inc. v. Almonte Corporation, No. 01 CV 5067 (DGT) (E.D.N.Y. Dec. 12, 2001) (attorney submitting a virtually identical brief). The only difference is the substitution of the parties' names and the brief application of law to fact. I therefore reduce that entry to .40 hours.
Further examination, of the time sheets reveals that some of Mr. Klass's time was spent performing the tasks of a legal assistant. For example, Mr. Klass expended .10 hours personally filing the complaint, .30 hours personally filing the civil cover sheet, and .10 hours personally filing the proof of service. These are unnecessary expenses insofar as they are billed at an attorney's hourly rate and I reduce this time accordingly. Furthermore, it is unreasonable to award Mr. Klass fees in the amount of $700.00 for three hours of "anticipated" work. As a result, I recommend that the total hours be reduced from 7.9 hours to 3.4 hours. This number is more reasonable in light of the amount of work required on a case such as this. Mr. Klass's services are billed at a rate of $250.00 per hour. Therefore, I recommend an award of $850.00 in attorney fees.
In addition to attorney fees, plaintiff is entitled to seek reimbursement for costs expended. See 47 U.S.C. § 605(e)(3)(B)(iii). Plaintiff, however, fails to make any such request or submit any receipts or records in this regard. Therefore, I recommend that no costs be granted.
CONCLUSION
For the above stated reasons, I respectfully recommend that a default judgment be entered and that plaintiff be awarded $5,000 in statutory damages, $10,000 for willfully violating the Communications Act and $850.00 in attorney fees.
Any objections to this Report and Recommendation must be filed with the Clerk of the Court, with a copy to the undersigned, within ten (10) days of receipt of this Report. Failure to file objections within the specified time waives the right to appeal the District Court's order. See 28 U.S.C. § 636(b)(1) (2000); Fed.R.Civ.P. 72, 6(a), 6(e).
SO ORDERED.
Dated: Brooklyn, New York February 8, 2002