Opinion
1:21-cv-07352 (AKH) (SDA)
05-03-2022
G & G Closed Circuit Events, LLC, Plaintiff, v. Delvis Batista et al., Defendants.
TO THE HONORABLE ALVIN K. HELLERSTEIN, UNITED STATES DISTRICT JUDGE:
REPORT AND RECOMMENDATION
STEWART D. AARON, UNITED STATES MAGISTRATE JUDGE.
INTRODUCTION
Before the Court is a motion by Plaintiff G&G Closed Circuit Events, LLC (“Plaintiff” or “G&G”), pursuant to Federal Rule of Civil Procedure 55(b)(2), for a default judgment against Defendants Delvis Batista, individually and d/b/a/ Bar 180 (“Batista”), and Hudson Heights Bar & Grill Corp. d/b/a Bar 180 (“Bar 180, ” together with Batista, “Defendants”) (Pl.'s 1/21/22 Not. of Mot., ECF No. 20), and a motion by Plaintiff for attorneys' fees and costs. (Pl.'s 4/28/22 Not. of Mot., ECF No. 32.)
For the reasons set forth below, I respectfully recommend that G&G's motion for default judgment be GRANTED IN PART and DENIED IN PART, that G&G's motion for attorneys' fees and costs be GRANTED IN PART and DENIED IN PART and that the Court enter judgment against Defendants in the amounts set forth in the Conclusion below.
BACKGROUND
I. Established Facts as a Result of Defendants' Default
The facts set forth below are drawn from Plaintiff's Complaint. In light of Defendants' default, the Court accepts Plaintiff's allegations as true, except for those pertaining to damages. See Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009).
G&G is a California-based corporation with its principal place of business in Nevada. (Compl., ECF No. 1, ¶ 6.) G&G owned the exclusive nationwide commercial distribution rights to a boxing match between Saul Alvarez and Daniel Jacobs to be telecast nationwide on May 4, 2019 (the “Program”). (Id. ¶ 19.) G&G “paid substantial fees” for the Program. (Id.) In distributing the Program, G&G entered into sublicensing agreements with commercial entities, to whom G&G would grant a limited right to broadcast the Program in exchange for a fee. (Id. ¶ 20-22.)
Batista owns Bar 180, a bar in New York City. (Compl. ¶ 9.) On May 4, 2019, Batista caused the unlawful interception, receipt and broadcast of the Program at Bar 180, broadcasting it on twelve screens to between forty-five to forty-eight patrons. (Id. ¶¶ 14, 26.) Defendants did not pay to G&G the requisite $875.00 fee for a business of Bar 180's size to have the right to show the Program. (Id. ¶ 28.) Batista “specifically directed” Bar 180's employees to “unlawfully intercept, and broadcast” the Program, or intentionally intercepted and/or published the Program himself. (Id. ¶ 14.) Broadcasting the Program “resulted in increased profits or financial benefit to Bar 180.” (Id. ¶ 16.)
II. Procedural History
On September 1, 2021, G&G filed the Complaint, asserting claims under the Federal Communications Act of 1934, 47 U.S.C § 605 et seq. (the “FCA”), and seeking statutory damages in the amount of $10,000, pursuant to Section 605(e)(3)(C)(i)(II) of the FCA; statutory damages for willful violation in the amount of $100,000, pursuant to Section 605(e)(3)(C)(ii) of the FCA; and costs and attorneys' fees, pursuant to Section 605(e)(3)(B)(iii) of the FCA. (Compl. ¶ 37.)
On January 6, 2022, the Clerk of the Court entered Certificates of Default against both Defendants. (Certs. of Default, ECF Nos. 15-16.) On January 21, 2022, G&G filed its motion for default judgment against both Defendants, accompanied by a memorandum of law (Pl.'s Mem., ECF No. 21), an Affidavit of Nicholas J. Gagliardi (Gagliardi Aff., ECF No. 22), a Declaration of Joseph P. Loughlin (Loughlin Decl., ECF No. 23) and a Statement of Damages. (Stmt. of Damages, ECF No. 25.)
On February 15, 2022, Plaintiff's motion was referred to the undersigned for a report and recommendation. (Order of Ref., ECF No. 26.) On February 17, 2022, I entered an Order requiring Defendants to file any response to Plaintiff's motion no later than March 21, 2022. (2/17/22 Order, ECF No. 29.) Defendants failed to respond.
On April 14, 2022, I directed Plaintiff to file submissions relating to the request in Plaintiff's default judgment motion for interest, costs and attorneys' fees. (4/14/22 Order, ECF No. 31.) On April 28, 2022, Plaintiff filed its motion for attorneys' fees and costs, accompanied by a memorandum of law (Pl.'s Second Mem., ECF No. 34) and a second Declaration of Joseph P. Loughlin. (Second Loughlin Decl., ECF No. 33.)
LEGAL STANDARDS
I. Default Judgment
“Federal Rule of Civil Procedure 55 sets out a two-step procedure to be followed for the entry of judgment against a party who fails to defend: the entry of a default, and the entry of a default judgment.” Bass v. Diversity Inc. Media, No. 19-CV-02261 (AJN), 2020 WL 2765093, at * 1 (S.D.N.Y. May 28, 2020). The first step “formalizes a judicial recognition that a defendant has, through its failure to defend the action, admitted liability to the plaintiff.” City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 128 (2d Cir. 2011). Under Rule 55(a), the Clerk of Court is empowered to enter a default against a party that has not appeared. See New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005). The Clerk has entered such a default against Defendants in this case. “The second step, entry of a default judgment, converts the defendant's admission of liability into a final judgment that terminates the litigation and awards the plaintiff any relief to which the court decides it is entitled, to the extent permitted by Rule 54(c).” Mickalis Pawn Shop, 645 F.3d at 128. “A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c).
In determining whether to grant a motion for default judgment, courts look to 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.” Intrepidus, LLC v. Bivins, No. 15-CV-07721 (LTS) (HBP), 2017 WL 1608896, at *3 (S.D.N.Y. Apr. 28, 2017) (citations omitted).
A defendant's default is deemed “a concession of all well-pleaded allegations of liability, ” Rovio Ent., Ltd. v. Allstar Vending, Inc., 97 F.Supp.3d 536, 545 (S.D.N.Y. 2015), but a default “only establishes a defendant's liability if those allegations are sufficient to state a cause of action against the defendants.” Gesualdi v. Quadrozzi Equip. Leasing Corp., 629 Fed.Appx. 111, 113 (2d Cir. 2015). The Court must determine “whether the allegations in a complaint establish the defendants' liability as a matter of law.” Id.
II. Damages
As noted above, on an inquest after default, “the Court ‘accept[s] as true all of the factual allegations of the complaint, except those relating to damages.'” Norcia v. Dieber's Castle Tavern, Ltd., 980 F.Supp.2d 492, 500 (S.D.N.Y. 2013) (quoting Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)). Once liability has been established, a court must “conduct an inquiry in order to ascertain the amount of damages with reasonable certainty.” Am. Jewish Comm. v. Berman, No. 15-CV-05983 (LAK) (JLC), 2016 WL 3365313, at *3 (S.D.N.Y. June 15, 2016)(quoting Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)), adopted by, 2016 WL 4532201 (S.D.N.Y. Aug. 29, 2016). A plaintiff “bears the burden of establishing [its] entitlement to recovery and thus must substantiate [its] claim with evidence to prove the extent of damages.” Dunn v. Advanced Credit Recovery Inc., No. 11-CV-04023 (PAE) (JLC), 2012 WL 676350, at *2 (S.D.N.Y. Mar. 1, 2012). The evidence the plaintiff submits must be admissible. See Poulos v. City of New York, No. 14-CV-03023 (LTS) (BCM), 2018 WL 3750508, at *2 (S.D.N.Y. July 13, 2018), adopted by, 2018 WL 3745661 (S.D.N.Y. Aug. 6, 2018). If the documents the plaintiff has submitted provide a “sufficient basis from which to evaluate the fairness of” the requested damages, the court need not conduct an evidentiary hearing. Fustock v. ContiCommodity Servs. Inc., 873 F.2d 38, 40 (2d Cir. 1989); see Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (explaining that court may determine appropriate damages based on affidavits and documentary evidence “as long as [the court has] ensured that there [is] a basis for the damages specified in the default judgment”) (citation omitted).
III. Costs And Attorneys' Fees
In an action under Section 605 of the FCA, the court “shall direct the recovery of full costs, including awarding reasonable attorneys' fees to an aggrieved party who prevails.” FCA § 605(e)(3)(B)(iii). Thus, “[a]n award of costs, including attorneys' fees, is mandatory under [Section] 605.” Joe Hand Promotions, Inc. v. Phillips, No. 06-CV-03624 (BSJ) (JCF), 2007 WL 2030285, at *6 (S.D.N.Y. July 16, 2007) (citing Section 605(e)(3)(B)(iii) and Int'l Cablevision, Inc. v. Sykes, 997 F.2d 998, 1009 (2d Cir. 1993)), adopted by, 2007 WL 2245351 (S.D.N.Y. Aug. 3, 2007).
“While the term, ‘full costs,' is not defined in the statute, both the plain meaning of the statutory language and the legislative history of [Section] 605(e)(3)(B)(iii) suggest that this term was intended to include expenses other than ‘taxable costs.'” Kingvision Pay-Per-View Ltd. v. Autar, 426 F.Supp.2d 59, 66 (E.D.N.Y. 2006). “[T]he [C]ourt has the power to direct the recovery of investigative fees” where a party “document[s] ‘(1) the amount of time necessary for the investigation; (2) how much the investigators charged per hour; [and] (3) why the investigators are qualified to demand the requested rate;'” this analysis tracks the same steps required for a determination of compensable attorney fees (discussed below). Id. at 67 (citations omitted).
Taxable costs include only: “(1) Fees of the clerk and marshal; (2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case; (3) Fees and disbursements for printing and witnesses; (4) Fees for exemplification and copies of papers necessarily obtained for use in the case; (5) Docket fees under [28 U.S.C. § 1923]; (6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under [28 U.S.C. § 1828].” Autar, 426 F.Supp.2d at 66-67 (quoting 28 U.S.C. § 1920)).
While a district court retains discretion to determine what constitutes a reasonable fee, “this discretion is not unfettered.” Millea v. Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011). “[W]hen a prevailing party is entitled to attorneys' fees, the district court must abide by the procedural requirements for calculating those fees articulated by [the Second Circuit] and the Supreme Court.” Id. “Both [the Second Circuit] and the Supreme Court have held that the lodestar - the product of a reasonable hourly rate and the reasonable number of hours required by the case - creates a ‘presumptively reasonable fee.'” Id. (citing Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010) and Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cty. of Albany, 522 F.3d 182, 189-90 (2d Cir. 2008)).
“Absent unusual circumstances, ” Scott v. City of New York, 626 F.3d 130, 133 (2d Cir. 2010) (Scott I), “[a]pplications for fee awards should generally be documented by contemporaneously created time records that specify, for each attorney, the date, the hours expended, and the nature of the work done.” Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998) (quoting Hensley v. Eckerhart, 461 U.S. 424, 437 (1933)); see also New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983) (application for attorneys' fees must be supported by “contemporaneous time records” that “specify, for each attorney, the date, the hours expended, and the nature of the work done”). “So long as an attorney ‘made contemporaneous entries as the work was completed, and that [her] billing was based on these contemporaneous records,' Carey is satisfied.” Marion S. Mishkin L. Off. v. Lopalo, 767 F.3d 144, 149 (2d Cir. 2014) (citing Carey, 711 F.2d at 1154). While “after Carey there are [a] few examples of this court permitting a district court to award fees in the absence of full contemporaneous records, ” courts in the Second Circuit “have allowed for such a recovery, ” only in cases in which “counsel has always maintained at least some contemporaneous records.” Scott I, 626 F.3d at 133 (emphasis in original) (citations omitted); see also id. (“Carey establishes a strict rule from which attorneys may deviate only in the rarest of cases”).
DISCUSSION
I. Default Judgment
A. Liability
All three of the requisite factors favor the entry of a default judgment here. See Intrepidus, LLC, 2017 WL 1608896, at *3. Defendants' failure to respond to the Complaint and to the motion for a default judgment indicates willful conduct. The Court is unaware of any meritorious defense, and Plaintiff will be prejudiced without the entry of a default judgment because Plaintiff will have no recourse if Plaintiff is denied the ability to obtain a default judgment.
In the Complaint, G&G seeks to hold Defendants liable under Sections 553 and 605 of the FCA. (Compl. ¶ 1.) “Whereas section 605 applies to the theft of a radio communication whether or not the radio communication is thereafter sent out over a cable network, section 553 applies to communication thefts from a cable network, whether or not the communication originated as a radio communication.” J & J Sports Prods., Inc. v. La Ruleta, Inc., No. 11-CV-04422 (NGG) (VVP), 2012 WL 3764062, at *2 (E.D.N.Y. Aug. 7, 2012) (citing Int'l Cablevision, Inc. v. Sykes, 75 F.3d 123, 132-33 (2d Cir. 1996)), adopted by, 2012 WL 3764515 (E.D.N.Y. Aug. 29, 2012).
“[W]hen a defendant's conduct has violated both sections 553 and 605, an aggrieved cable operator is entitled to only one, non-duplicative recovery.” J & J Sports Prods., Inc. v. Chulitas Enter. Corp., No. 12-CV-03177 (JS) (WDW), 2014 WL 917262, at *3 (E.D.N.Y. Mar. 10, 2014) (quoting J & J Sports Prods., Inc. v. Alvarez, No. 07-CV-08852 (RPP) (HBP), 2009 WL 3096074, at *4 (S.D.N.Y. Sept. 25, 2009) (internal quotation omitted)). If a defendant violated both statutes, “the court should award damages pursuant to Section 605.” Innovative Sports Mktg., Inc. v. Aquarius Fuente De Soda, No. 07-CV-02561 (ENV) (CLP), 2009 WL 3173968, at *5 (E.D.N.Y. Sept. 30, 2009).
In the present case, G&G has elected to seek damages under Section 605 only, and therefore, the Court need only evaluate Defendants' liability under that provision. See J & J Sports Prods., Inc. v. Fantasy Bar and Rest. Corp., No. 17-CV-05355 (JGK) (DF), 2018 WL 5018065, at *3 (S.D.N.Y. Sept. 20, 2018) (where plaintiff specified that it sought relief under Section 605, analyzing motion for default judgment under that section only), adopted by, 2018 WL 5016606 (S.D.N.Y. Oct. 15, 2018); J & J Sports Prods., Inc. v. 1400 Forest Ave Rest. Corp., No. 13-CV-04299 (FB) (VMS), 2014 WL 4467774, at *5 (E.D.N.Y. Sept. 9, 2014) (evaluating liability and damages under Section 605 only).
Section 605 of the FCA provides, as relevant here, 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). The Second Circuit has held that Section 605(a) is applicable to theft of cable communications that originated as a radio or satellite communication. See Cmty. Television Sys. Inc. v. Caruso, 284 F.3d 430, 435 (2d Cir. 2002) (explaining that Section 605 applies “as long as the head end of the cable system at issue receives at least some radio transmissions”); Sykes, 75 F.3d at 133 (noting that Section 605 “not only prohibits unauthorized interception of traditional radio communications, but also communications transmitted by means of new technologies”).
1. Bar 180's Liability
The Court finds that G&G's well-pleaded allegations establish that Bar 180 violated Section 605 of the FCA. G&G held exclusive rights to distribute the Program, which it distributed via “coded or ‘scrambled'” satellite transmission to businesses that entered into a sublicense and paid the requisite fee. (Compl. ¶¶ 19-22, 24.) Defendants did not pay the $875.00 fee required of a business of Bar 180's size to display the Program. (Id. ¶ 28.) Instead, Bar 180 “intercepted and/or received the satellite communication of the Program” and illicitly shared the Program with its patrons. (Id. ¶¶ 30-31.)
Although G&G has not alleged “the precise method” by which Bar 180 obtained unauthorized access to the Program, see 1400 Forest Ave., 2014 WL 4467774, at *6, it is sufficient, for purposes of establishing a violation of Section 605, that G&G alleged “that electronic decoding equipment and satellite coordinates were necessary to receive the signal for the event.” See Chulitas, 2014 WL 917262, at *3; see J & J Sports Prods., Inc. v. Onyx Dreams Inc., No. 12-CV-05355 (SLT) (LB), 2013 WL 6192546, at *3 (E.D.N.Y. Nov. 26, 2013) (“section 605 applies to the theft of a radio communication whether or not the radio communication is thereafter sent out over a cable network”). Given Bar 180's default, and the Court's obligation to accept G&G's well-pleaded allegations as true, G&G has adequately demonstrated that Bar 180 is liable under Section 605.
2. Batista's Liability
G&G also seeks to hold Batista liable as the owner and operator of Bar 180. (Compl. ¶ 98.) To hold an individual liable under Section 605(a), a plaintiff must show either “contributory infringement” - when an individual “authorize[d] the violations” - or “vicarious liability” - when the individual “had a right and ability to supervise the infringing activities and had an obvious and direct financial interest in the exploitation of [the] copyrighted materials.” J & J Sports Prods. v. Tellez, No. 11-CV-02823 (SMG), 2011 WL 6371521, at *6 (E.D.N.Y. Dec. 20, 2011) (citation omitted).
G&G alleges that Batista, on the date of the Program, was the owner and principal of Bar 180, and “had the right and ability to supervise the activities of Bar 180.” (Compl. ¶ 12.) G&G also alleges that Batista “had an obvious and direct financial interest in the activities of Bar 180, ” including the “unlawful interception, receipt, and publication” of the Program. (Id. ¶ 15.) These allegations demonstrate that Batista had both “supervisory control” over Bar 180, and “a direct financial interest in its showing of the [Program].” See 1400 Forest Ave., 2014 WL 4467774, at *6. The allegations therefore are sufficient to establish Batista's individual liability under Section 605(a). See id. (finding allegations that individual defendant was “the officer, director, shareholder, and principal” with “supervisory control” over the establishment and a “direct financial interest” in the showing of the event were sufficient to establish individual liability under Section 605). Given Batista's default, and the Court's obligation to accept G&G's well-pleaded allegations as true, G&G has adequately demonstrated that Batista is liable under Section 605.
B. Damages
1. Damages Against Bar 180
“Where liability is found under Section 605(a) of the [FCA], a plaintiff may elect to recover either actual damages under Section 605(e)(3)(C)(i)(I), or statutory damages under Section 605(e)(3)(C)(i)(II).” Fantasy Bar and Rest. Corp., 2018 WL 5018065, at *3. G&G has elected to recover statutory damages under Section 605. (Pl.'s Mem. at PDF p. 5.)
Section 605(e)(3)(C)(i) provides that “[d]amages awarded by any court under this section shall be computed, at the election of the aggrieved party, in accordance with either of the following clauses: (I) the party aggrieved may recover the actual damages suffered by him as a result of the violation and any profits of the violator that are attributable to the violation which are not taken into account in computing the actual damages; in determining the violator's profits, the party aggrieved shall be required to prove only the violator's gross revenue, and the violator shall be required to prove his deductible expenses and the elements of profit attributable to factors other than the violation; or (II) the party aggrieved may recover an award of statutory damages for each violation of subsection (a) involved in the action in a sum of not less than $1,000 or more than $10,000, as the court considers just ....” 47 U.S.C. § 605(e)(3)(C)(i).
Because G&G “had a proprietary interest in the intercepted communications, it qualifies as a ‘person aggrieved' within the meaning of” Section 605(d)(6), and is thus “entitled to recover statutory damages of $1,000 to $10,000 for each violation of Section 605(a), as per Section 605(e)(3)(C)(i)(II).” See Fantasy Bar and Rest., 2018 WL 5018065, at *4. G&G also may receive an increased award of up to $100,000 on a finding that Defendants' violation of Section 605(a) was committed “willfully and for purposes of direct or indirect commercial advantage or private financial gain ....” 47 U.S.C. § 605(e)(3)(C)(ii). Under the FCA, the court may award such enhanced damages “in its discretion.” Id. Here, G&G seeks both statutory damages as well as enhanced damages for Defendants' willful violation of the FCA. (Compl. ¶ 37; Pl.'s Mem. at PDF p. 4.)
Under the FCA, “‘any person aggrieved' shall include any person with proprietary rights in the intercepted communication by wire or radio, including wholesale or retail distributors of satellite cable programming ....” 47 U.S.C. § 605(d)(6).
a. Statutory Damages
G&G seeks $2,625.00 in statutory damages. (See Pl.'s Mem. at PDF p. 8.) There are two approaches taken by courts in the Second Circuit to arrive at statutory damages. “The first approach has been to award a flat sum, based on a plaintiff's submitted evidence as to the amount of the license fee that the particular establishment, given its size, would have had to pay to secure the rights to the broadcast in question.” Fantasy Bar and Rest., 2018 WL 5018065, at *4. “The second approach has been to multiply (a) the number of patrons present in the establishment when the unauthorized display occurred by (b) a figure representing the estimated price that each patron would have had to pay to view an authorized broadcast of the event at home.” Id. Courts employing the second approach typically have used a multiplier of approximately $50 per patron, with several Eastern District of New York courts using $54.95 per patron as a “market-based standard.” Id. (collecting cases using multipliers between $50 and $54.95).
The Court may use one of these two approaches, but not both. See J & J Sports Prods., Inc. v. Sugar Cafe Inc., No. 17-CV-05350 (RA), 2018 WL 324266, at *1 (S.D.N.Y. Jan. 5, 2018) (holding that statutory damages should be “the greater of two numbers: the flat fee that Plaintiff would have charged Defendants to air the programming at their establishment or the sum of what each individual who viewed the event at Defendants' establishment would have paid to view it at home”); 1400 Forest Ave., 2014 WL 4467774, at *8 (noting that awarding statutory damages on flat-fee or per-patron basis better reflects plaintiff's actual loss because “interested viewers would have watched the Event at home or [in defendant's establishment] . . . not in both places”).
Plaintiff would have charged Bar 180 a flat fee of $875.00 for a legal broadcast of the Program. (Gagliardi Aff. ¶ 8.) In addition, Plaintiff has shown that 45-48 patrons were in Bar 180 during the Program. (Compl. ¶ 26.) At the commonly-used market rate of $54.95, Plaintiff's damages also could be calculated as between $2,472.75 (i.e., $54.95 x 45) and $2,637.50 (i.e., $54.95 x 48). Because the greater of the two approaches results in damages of between $2,472.75 and $2,637.50, I respectfully recommend that Plaintiff be awarded the $2,625.00 in statutory damages that it seeks.
b. Enhanced Damages
Next, the Court must consider G&G's request for $7,875.00 in enhanced damages for a willful violation under Section 605(e)(3)(C)(ii). (Loughlin Decl. ¶ 8.) “Courts [in New York] use a variety of factors” when faced with the question of whether to award enhanced damages rooted in a defendant's willfulness, including “(1) repeated violations over an extended period of time; (2) substantial unlawful monetary gains; (3) significant actual damages to plaintiff; (4) defendant's advertising for the intended broadcast of the event; and (5) defendant's charging a cover charge or charging premiums for food and drinks.” Kingvision Pay-Per-View Ltd. v. Rodriguez, No. 02-CV-07972 (SHS), 2003 WL 548891, at *2 (S.D.N.Y. Feb. 25, 2003). “An award of enhanced damages ensures that a willful defendant's ‘profits are disgorged' and aims to deter ‘similar acts of cable piracy in the future.'” Sugar Cafe, 2018 WL 324266, at *2 (citations omitted).
In the present case, the Court finds that it is sufficient to establish willfulness that Bar 180 transmitted the Program on a closed-circuit broadcast, which Defendants only could have obtained through “a deliberate act.” See Fantasy Bar & Rest., 2018 WL 5018065, at *7; see Time Warner Cable of New York City v. Googie's Luncheonette, Inc., 77 F.Supp.2d 485, 490 (S.D.N.Y. 1999) (“Signals do not descramble spontaneously, nor do television sets connect themselves to cable distribution systems.”).
The Court further finds that enhanced damages in an amount three times the amount of base damages are appropriate. See Joe Hand Promotions, Inc. v. Batista, No. 20-CV-06460 (JPC) (SLC), 2021 WL 3855315, at *9 (S.D.N.Y. July 23, 2021) (“[T]he more current standard for enhanced damages in this District appears to be in line with our colleagues in the Eastern District - to award enhanced damages treble the amount of the statutory damages.”), adopted by, 2021 WL 3855311 (S.D.N.Y. Aug. 27, 2021). Accordingly, I respectfully recommend that an award of enhanced damages is appropriate in this case, in the amount of $7,875.00 (three times $2,625.00).
2. Damages Against Batista
a. Statutory Damages
Statutory damages are appropriate against Batista since he had “a right and ability to supervise” the FCA violations of a corporate defendant and “a strong financial interest” in the unauthorized activities. See Fantasy Bar & Rest., 2018 WL 5018065, at *8. Thus, the Court recommends that statutory damages of $2,625.00 be awarded against Batista, jointly and severally with Bar 180.
b. Enhanced Damages
Some courts have held that allegations of an individual defendant's right and ability to supervise along with a financial interest were not a sufficient “evidentiary basis” on which to conclude that the individual defendant acted willfully for purposes of imposing enhanced damages under section 605(e)(3)(C)(ii). See Sugar Cafe, 2018 WL 324266, at *3; see also Batista, 2021 WL 3855315, at *10-11 (finding Batista not individually liable for enhanced damages based upon activities of Bar 180).
In the present case, as in Sugar Cafe and Batista, supra, Plaintiff alleges that Batista “had the right and ability to supervise the activities of Bar 180” and “had an obvious and direct financial interest in the activities of Bar 180.” (Compl. ¶¶ 12, 15.) Moreover, Plaintiff alleges that Batista was listed on Bar 180's New York State liquor license as Bar 180's “Principal.” (Id. ¶ 10.)
What distinguishes this case, however, from those where individual defendants were not held liable for enhanced damages is that here Plaintiff has alleged that Batista personally engaged in knowing, willful conduct that would warrant an award of enhanced damages against him under Section 605(e)(3)(C)(ii). See Fantasy Bar & Rest., 2018 WL 5018065, at *9. Plaintiff has alleged that “Batista specifically directed the employees of Bar 180 to unlawfully intercept, receive and broadcast Plaintiff's Program at Bar 180 or intentionally intercepted and/or published the Program at Bar 180 himself.” (Compl. ¶ 14.) The Court finds that these well-pleaded allegations are sufficient, in light of Batista's default, to find Batista liable for enhanced damages. See Silvestre, 2019 WL 179810, at *8 (finding allegations that individual defendant “specifically directed or permitted the employees of [defendant establishment] to unlawfully intercept and broadcast [the] Program . . . or intentionally intercepted, and/or published the Program at [defendant establishment] himself” sufficient for award of enhanced damages). Thus, the Court recommends that enhanced damages of $7,875.00 be awarded against Batista, jointly and severally with Bar 180.
II. Attorneys' Fees
G&G seeks an award of attorneys' fees in the amount of $1,902.50. (Pl.'s Second Mem. at PDF p. 4). The billing records G&G has submitted are not contemporaneous, but rather were “reconstructed by way of a thorough review of the files themselves.” (Loughlin Second Decl. ¶ 6; see also Pl.'s Second Mem. at PDF p. 2.) As set forth above, however, “[i]t is well settled that a plaintiff must ‘document the application [for fees and costs] with contemporaneous time records . . . specify[ing], for each attorney, the date, the hours expended, and the nature of the work done.'” Silvestre, 2019 WL 179810, at *5 (quoting Carey, 711 F.2d 1136). “Under the strict rule set forth in Carey, the Court should thus not award fees.” Id.
Despite its concession that its billing records are not contemporaneous, G&G nevertheless advances three arguments why the Court should award attorneys' fees. First, G&G cites to the Second Circuit's recognition that “there are exceptions to this general rule [of denying fees absent contemporaneous records] (albeit somewhat rare).” (Pl.'s Second Mem. at PDF p. 2 (citing Scott I, 626 F.3d at 133-34).) Second, G&G argues that “an attorney seeking legal fees should be afforded an opportunity to explain whether the records he or she kept are sufficient.” (Id. (citing Lopalo, 767 F.3d at 149-50).) Third, G&G cites a case from the Eastern District of California in which the court found attorneys' fees “to be reasonable and did not reduce the number of hours.” (Id. at PDF p. 3 (citing Joe Hand Promotions, Inc. v. Albright, No. 11-CV-02260 (WBS) (CMK), 2013 WL 4094403 (E.D. Cal. Aug. 13, 2013)).)
As an initial matter, the Court notes that G&G's arguments are the same three arguments an FCA plaintiff (who was also represented by Plaintiff's counsel), advanced in support of its request for attorneys' fees in the absence of contemporaneous records in Silvestre, each of which the court carefully analyzed and rejected, awarding only fees recovered during a court appearance. See Silvestre, 2019 WL 179810, at *5-6 (citing Scott v. City of New York, 643 F.3d 56, 58-59 (2d Cir. 2011) (“Scott II”)).
G&G itself once again made the same arguments in G&G Closed Circuit Events, LLC v. Jimenez et al., No. 20-CV-07489, 2021 U.S. Dist. LEXIS 219335 (S.D.N.Y. Nov. 12, 2021), adopted by 2021 U.S. Dist. LEXIS 231303 (S.D.N.Y., Dec. 1, 2021), which also were rejected by that court.
G&G does not argue that its counsel attended any court appearances for which it could be awarded fees under Scott II, nor does the docket reflect any in-person appearances by G&G's counsel. The Court therefore recommends that, due to the absence of any contemporaneous records or proof of any in-person appearances compensable under Scott II, G&G's request for attorneys' fees be denied in its entirety.
In Scott II, the Second Circuit held that it was appropriate to award “limited fees for any contemporaneously documented time that [the attorney] was physically before the district court, ” and that “entries in official court records (e.g. the docket, minute entries, and transcriptions of proceedings) may serve as reliable documentation of an attorney's compensable hours in court at hearing and at trial and in conferences with the judge or other court personnel.” 643 F.3d at 59.
III. Costs
G&G also seeks an award of costs in the amount of $1,486.20. (Pl.'s Second Mem. at PDF p. 4.) The records G&G has submitted include receipts that substantiate this amount as consisting of (1) $650.00 in investigator fees; (2) $402.00 in fees for filing this action in this Court; and (3) $434.20 in process server fees. (See Loughlin Second Decl. ¶ 9 and Exs. 2 & 3.)
The $402.00 filing fee is reflected on the Court's docket (see ECF No. 1), and G&G has provided invoices for the process server fees. (See Loughlin Decl., ECF No. 33, Ex. 3.) Accordingly, the Court finds that G&G has adequately substantiated its request for these two costs. See Silvestre, 2019 WL 179810, at *6 (awarding costs for process server and filing fees).
As to the investigator fees, “courts in this District have declined to award such costs.” Silvestre, 2019 WL 179810, at *7; see also J & J Sports Prods., Inc. v. Garcia, No. 06-CV-04297 (GBD) (HBP), 2011 WL 1097538, at *6 (S.D.N.Y. Mar. 1, 2011) (collecting cases denying award of investigator fees), adopted by, 2011 WL 1046054 (S.D.N.Y. Mar. 22, 2011). In support of its request for investigator fees, G&G cites only cases outside of this District (Pl.'s Second Mem. at PDF pp. 3-4), just as it did in Silvestre and Jimenez, without success. See Silvestre, 2019 WL 179810, at *7; Jimenez, 2021 U.S. Dist. LEXIS 219335, at *27. In the case Autar, from the Eastern District of New York, on which G&G relies, as it did in Jimenez, the court explained that to recover investigator fees, “a plaintiff must make a showing similar to that required to recover attorneys' fees.” Autar, 426 F.Supp.2d at 67 (explaining that plaintiff seeking to recover investigator fees must show investigator's time, hourly rate and qualifications).
In the present case, as in Silvestre, G&G “has failed to provide the same required information about the investigator expenses, and accordingly should not be awarded those costs.” See Silvestre, 2019 WL 179810, at *7; see also Garcia, 2011 WL 1097538, at *6 (declining to award investigator fees where plaintiff did not provide required information). Thus, Plaintiff is not entitled to recover investigator fees. Accordingly, I recommend that G&G be awarded $836.20 in costs, reflective of the process server and court filing fees, only.
IV. Interest
G&G seeks an award of pre-judgment interest. “Although no statute authorizes an award of pre-judgment interest for violations of Sections 553 and 605 of the [FCA], a district court has discretion to impose a pre-judgment interest award ‘to make a plaintiff whole.'” Fantasy Bar & Rest., 2018 WL 5018065, at *9 (quoting Williams v. Trader Publ'g Co., 218 F.3d 481, 488 (5th Cir. 2000)). The Second Circuit has permitted pre-judgment interest awards, absent express statutory authorization, “when the awards [are] fair, equitable and necessary to compensate the wronged party fully.” Wickham Contracting Co. v. Loc. Union No. 3, 955 F.2d 831, 835 (2d Cir. 1992).
The Court finds that an award of pre-judgment interest is not warranted. The Court has calculated the recommended amount of statutory and enhanced damages with the intention of making G&G “whole . . . without need for pre-judgment interest to serve that purpose.” Fantasy Bar & Rest., 2018 WL 5018065, at *9; see also G&G Closed Cir. Events, LLC v. Batista, No. 20-CV-05073 (NRB), 2021 WL 293150, at *2 (S.D.N.Y. Jan. 28, 2021) (“Given the punitive nature of the default judgment awarded here, the Court declines to exercise its discretion to award prejudgment interest.”). Accordingly, I respectfully recommend that G&G's request for prejudgment interest be denied.
G&G also seeks an award of post-judgment interest. Plaintiff is entitled to collect interest on the judgment at the federal statutory rate prescribed in 28 U.S.C. § 1961(a) from the date judgment is entered. See Schipani v. McLeod, 541 F.3d 158, 165 (2d Cir. 2008) (award of postjudgment interest is mandatory). Thus, I respectfully recommend that post-judgment interest be awarded, pursuant to 28 U.S.C. § 1961(a).
CONCLUSION
For the reasons set forth above, the Court respectfully recommends that G&G's motion for default judgment be GRANTED IN PART AND DENIED IN PART and that G&G's motion for attorneys' fees and costs be GRANTED IN PART and DENIED IN PART, as follows:
(i) Plaintiff should be awarded $2,625.00 in statutory damages, pursuant to Section 605(e)(3)(C)(i)(II), against Batista and Bar 180, jointly and severally;
(ii) Plaintiff should be awarded $7,875.00 in enhanced damages, pursuant to Section 605(e)(3)(C)(ii), against Batista and Bar 180, jointly and severally;
(iii) Plaintiff should be awarded costs in the amount of $836.20, pursuant to Section 605(e)(3)(B)(iii), against Batista and Bar 180, jointly and severally; and
(iv) Plaintiff should be awarded post-judgment interest, pursuant to 28 U.S.C. § 1961(a).No later than May 5, 2022, Plaintiff shall mail a copy of this Report and Recommendation to Defendants at the addresses reflected in ECF No. 36 and file proof of service to the ECF docket.
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation and Order to file written 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. see also Fed.R.Civ.P. 6(a), (d) (adding three additional days when service is made under Fed.R.Civ.P. 5(b)(2)(C), (D) or (F)). A party may respond to another party's objections within fourteen days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Any requests for an extension of time for filing objections must be addressed to Judge Hellerstein.
FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).