Opinion
Civil Action 20 Civ. 7489 (PAE) (SLC)
11-12-2021
G&G CLOSED CIRCUIT EVENTS, LLC, Plaintiff, v. ANDRES JIMENEZ, et al., Defendants.
HONORABLE PAUL A. ENGELMAYER, United States District Judge.
REPORT AND RECOMMENDATION
SARAH L. CAVE, United States Magistrate Judge.
I. INTRODUCTION
Plaintiff G&G Closed Circuit Events, LLC (“G&G”), a closed-circuit distributor of sports and entertainment programming, asserts cable piracy, satellite piracy, and copyright claims against Defendants Andres Jimenez (“Mr. Jimenez”) and Prospect Billiards Corp. d/b/a/ Prospect Billiards Cafe (“Prospect, ” together with Mr. Jimenez, “Defendants”) arising out of Defendants' unauthorized September 16, 2017 broadcast of the Saul Alvarez v. Gennady Golovkin IBF World Middleweight Championship Fight Program (the “Program”), to which G&G held the exclusive distribution rights. (ECF No. 1 fl 19). The Honorable Paul A. Engelmayer entered an order of default judgment against Defendants (“Default Order”) pursuant to Federal Rule of Civil Procedure 55(b)(2) and referred this matter to the undersigned for an inquest on damages. (ECF Nos. 25; 26).
In connection with the damages inquest, G&G has also submitted, in response to the Court's request, a Motion for Attorneys' Fees (ECF No. 29 (“Fee Motion”)), accompanying Memorandum of Law (ECF No. 30 (“G&G's Memo”)), Declaration by Mr. Joseph P. Loughlin with accompanying exhibits (ECF No. 31 (“Second Loughlin Declaration”)), and Proposed Default Judgment (ECF No. 32).
For the reasons that follow, I respectfully recommend that G&G's Fee Motion be granted in part and denied in part, and G&G be awarded: (i) statutory damages in the amount of $2,500; (ii) enhanced damages in the amount of $7,500; (iii) $596.88 in costs; and (iv) post-judgment interest pursuant to 28 U.S.C. § 1961.
II. BACKGROUND
Given Defendants' default, the Court accepts as true all well-pleaded factual allegations in G&G's Complaint (ECF No. 1), except as to damages. See City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (“[I]t is an ‘ancient common law axiom' that a defendant who defaults thereby admits all ‘well-pleaded' factual allegations contained in the complaint.”) (quoting Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004)); Whitehead v. Mix Unit, LLC, No. 17 Civ. 9476 (VSB) (JLC), 2019 WL 384446, at *1 (S.D.N.Y. Jan. 31, 2019).
A. Factual Background
G&G is a California-based corporation with its principal place of business in Nevada. (ECF No. 1 fl 6). G&G owned the exclusive nationwide commercial distribution rights to the Program pursuant to an agreement with Golden Boy Promotions LLC, for which G&G “paid substantial fees.” (Id. fl 19). In distributing the Program, G&G entered into sublicensing agreements with commercial entities, to whom G&G would grant a limited right to exhibit the Program. (Id. fl 2021).
Mr. Jimenez owns Prospect, a bar in the Bronx, New York. (ECF No. 1 fl 9). G&G alleges that on September 16, 2017, Mr. Jimenez permitted the “unlawful interception, receipt and publication of” the Program at Prospect, broadcasting it on seven screens to between ten and twelve patrons. (Id. flfl 13, 26, 34, 39). Defendants did not pay to G&G the requisite $2,500 fee for a business of Prospect's size to have the right to show the Program. (Id. fl 28). G&G alleges that Mr. Jimenez had imputed knowledge of the unlawful broadcast because Prospect's employees are Mr. Jimenez's agents, and he either “specifically directed” Prospect's employees to “unlawfully intercept, [or] receive” the Program, or did so himself. (Id. fl 14). Broadcasting the Program may have “resulted in increased profits or financial benefit to Prospect.” (Id. fl 17).
B. Procedural Background
On September 11, 2020, 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(3)(C)(i)(II) of the FCA, statutory damages for willful violation in the amount of $100,000 pursuant to section 605(3)(C)(ii) of the FCA, and for costs and attorneys' fees pursuant to section 605(3)(B)(iii) of the FCA. (ECF Nos. 1 fl 37; 30 at 34).
In the Complaint, G&G also asserted a claim under section 553 of the FCA, seeking statutory damages of $10,000 under section 553(c)(3)(A)(ii), statutory damages for willful violation of $50,000 under section 553(c)(3)(B), and attorneys' fees under section 553(c)(2)(C). (ECF No. 1 fl 45). G&G did not address the section 553 claim in the Default Motion or the Fee Motion, and thus appears to have abandoned them. (ECF Nos. 16-19; 29-31). Abandoning the section 553 claim was appropriate because “[i]n cases where both sections 553 and 605 were violated, damages should be awarded only under section 605 instead of the ‘lesser damages available' under section 553.” G&G Closed Circuit Events, LLC, v. Pacheco, No. 20 Civ. 7457 (LJL), 2021 WL 4296649, at *3 (S.D.N.Y. Sept. 20, 2021) (quoting Int'l Cablevision, Inc. v. Sykes, 997 F.2d 998, 1009 (2d Cir. 1993)).
On January 4, 2021, the Clerk of the Court entered Certificates of Default against both Defendants. (ECF Nos. 14-15). On January 19, 2021, G&G filed a Motion for Default Judgment (“Default Motion”) as to both Defendants, accompanied by an affidavit of Nicholas J. Gagliardi (ECF No. 17), a memorandum of law (ECF No. 18), an initial declaration by Mr. Joseph P. Loughlin (ECF No. 19 (“First Loughlin Declaration”)), and a Statement of Damages (ECF No. 21 (“Damages Statement”)). In the Default Motion, G&G reduced its damages request to $7,500 under section 605(3)(C)(i)(II) and to $22,500 under section 605(3)(C)(ii), “plus pre- and post-judgment interest at the federal statutory rate.” (ECF No. 16 at 3).
On March 2, 2021, Judge Engelmayer entered the Default Order against Defendants and referred this matter for a damages inquest. (ECF Nos. 25-26).
On September 13, 2021, the Court ordered G&G to submit additional documentation in support of its request for attorneys' fees and costs. (ECF No. 27). On September 14, 2021, G&G filed the Fee Motion (ECF No. 29).
III. LEGAL STANDARD
A. Default Judgment
A party seeking a default judgment must follow the two-step procedure set forth in Federal Rule of Civil Procedure 55. See Bricklayers & Allied Craftworkers Loc. 2 v. Moulton Masonry & Constr., LLC, 779 F.3d 182, 186-87 (2d Cir. 2015). First, under Rule 55(a), where a party has failed to plead or otherwise defend in an action, the Clerk of the Court must enter a certificate of default. See Fed.R.Civ.P. 55(a). Second, after entry of the default, if the party still fails to appear or move to set aside the default, the Court may enter a default judgment. See Fed. R. Civ. P. 55(b). Whether to enter a default judgment lies in the “sound discretion” of the trial court. Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993). Because a default judgment is an “extreme sanction” that courts are to use as a tool of last resort, Meehan v. Snow, 652 F.2d 274, 277 (2d Cir. 1981), the district court must “carefully balance the concern of expeditiously adjudicating cases, on the one hand, against the responsibility of giving litigants a chance to be heard, on the other.” Fermin v. Las Delicias Peruanas Rest., Inc., 93 F.Supp.3d 19, 29 (E.D.N.Y. Mar. 19, 2015) (citing Enron, 10 F.3d at 96). In considering whether to grant a default judgment, district courts are “guided by the same factors [that] apply to a motion to set aside entry of a default.” First Mercury Ins. Co. v. Schnabel Roofing of Long Is., Inc., No. 10 Civ. 4398 (JS) (AKT), 2011 WL 883757, at *1 (E.D.N.Y. Mar. 11, 2011). “These factors include: (1) whether the default was willful; (2) whether ignoring the default would prejudice the opposing party; and (3) whether the defaulting party has presented a meritorious defense.” J & J Sports Prods. Inc. v. 1400 Forest Ave. Rest. Corp., No. 13 Civ. 4299 (FB) (VMS), 2014 WL 4467774, at *4 (E.D.N.Y. Sept. 10, 2014) (citing Swarna v. Al-Awadi, 622 F.3d 123, 142 (2d Cir. 2010)).
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 the complaint establish the defendants' liability as a matter of law.” Id. If, however, the complaint fails to state a claim on which relief may be granted, the court may not award damages, “even if the post-default inquest submissions supply the missing information.” Perez v. 50 Food Corp., No. 17 Civ. 7837 (AT) (BCM), 2019 WL 7403983, at *4 (S.D.N.Y. Dec. 4, 2019).
B. Statutory 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 Civ. 5983 (LAK) (JLC), 2016 WL 3365313, at *3 (S.D.N.Y. June 15, 2016), adopted by, 2016 WL 4532201 (S.D.N.Y. Aug. 29, 2016) (quoting Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)). 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 Civ. 4023 (PAE) (JLC), 2012 WL 676350, at *2 (S.D.N.Y. Mar. 1, 2012). The evidence the plaintiff submits must be admissible. Poulos v. City of New York, No. 14 Civ. 3023 (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); see House v. Kent Worldwide Mach. Works, Inc., 359 Fed.Appx. 206, 207 (2d Cir. 2010) (summary order) (explaining that “damages must be based on admissible evidence”). 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 a 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).
“The burden is [then] on the plaintiff to establish entitlement to the recovery of damages.” Norcia, 980 F.Supp.2d at 500 (citing State Auto Prop. & Cas. Ins. Co. v. Shats, No. 11 Civ. 220, 2013 WL 1736794, at *3 (E.D.N.Y. Mar. 28, 2013)). “Unless damages are certain, they must be proven in a post-default inquest where the defendant[s] ha[ve] an opportunity to contest the plaintiff's claims.” Id. (citing Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974)). In addition to “assessing plaintiff's evidence supporting the damages to be determined, ” the Court's evaluation of “the appropriate amount of damages” must involve a “determin[ation of] the proper rule for calculating damages on such a claim[.]” Credit Lyonnais, 183 F.3d at 155. The “proper rule” is determined by New York law. See Hinckley v. Westchester Rubbish, Inc., No. 04 Civ. 0189, 2006 WL 2849841, at *4 (S.D.N.Y. Oct. 2, 2006) (“The assessment of damages following entry of a default judgment in a diversity action is governed by state law standards.”) (citing Consorti v. Armstrong World Indus., Inc., 103 F.3d 2, 4 (2d Cir. 1995)). “Under New York law . . . courts look to approved awards in similar cases as guideposts in fashioning appropriate damage awards.” Norcia, 980 F.Supp.2d at 500-01.
C. Attorneys' Fees
“An award of costs, including attorneys' fees, is mandatory under [section] 605.” Joe Hand Promotions, Inc. v. Phillips, No. 06 Civ. 3624 (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). “In the Second Circuit, courts evaluate attorneys' fees in two parts.” Rutledge v. Haru Inc., No. 20 Civ. 7641 (AJN), 2021 WL 4429328, at *3 (S.D.N.Y. Sept. 27, 2021) (citing Millea v. Metro-North R.R. Co., 658 F.3d 154, 166-67 (2d Cir. 2011)). “The court first determines the ‘reasonable hourly rate' for the attorney [and t]hat hourly rate is then multiplied by the reasonable number of hours worked to calculate a ‘presumptively reasonable fee.'” Id.
“Absent unusual circumstances, ” Scott v. City of New York, 626 F.3d 130, 133 (2d Cir. 2010) (“Scott I”), “[applications 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)); Cardwell v. Davis Polk & Wardwell LLP, No. 19 Civ. 10256 (GHW), 2021 WL 4392278, at *1 (S.D.N.Y. Sept. 23, 2021) (explaining that plaintiff seeking attorneys' fees must “support its request with contemporaneous time records that show ‘for each attorney, the date, the hours expended, and the nature of the work done'”) (citation omitted). “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 New York State Ass'n for Retarded Child., Inc. v. Carey, 711 F.2d 1136 (2d Cir. 1983)). 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 added).
D. Costs
“Section 605(e)(3)(B)(iii) expressly provides that a court ‘shall direct the recovery of full costs, . . . to an aggrieved party who prevails'” such as G&G. Kingvision Pay-Per-View Ltd. v. Autar, 426 F.Supp.2d 59, 65 (E.D.N.Y. 2006) (quoting section 605(e)(3)(B)(iii)). “Relying on this language, courts in this Circuit have repeatedly held that ‘under [s]ection 605 the award of costs . . . is mandatory.'” Id. (citing Garden City Boxing Club, Inc. v. Polanco, No. 05 Civ. 3411 (DC), 2006 WL 305458, at *4 (S.D.N.Y. Feb. 7, 2006), aff'd, 228 Fed.Appx. 29 (2d Cir. 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.'” Id. at 66. “[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. Id. at 67 (internal 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).
IV.ANALYSIS
A. Default Judgment
As noted above, before entering a default judgment, the Court must consider “(1) whether the default was willful; (2) whether ignoring the default would prejudice the opposing party; and (3) whether the defaulting party has presented a meritorious defense.” 1400 Forest Ave., 2014 WL 4467774, at *4; see Mason Tenders Dist. Council v. Duce Constr. Corp., No. 02 Civ. 9044 (LTS) (GWG), 2003 WL 1960584, at *2 (S.D.N.Y. Apr. 25, 2003) (listing three factors).
Here, each factor supports entry of default judgment. First, Defendants' failure to respond to the Complaint is itself “sufficient to demonstrate willfulness.” 1400 Forest Ave., 2014 WL 4467774, at *4 (collecting cases). Defendants neither answered, nor responded to the Complaint or the Default Motion, nor requested any extensions of time to do so. Defendants' failure to respond establishes willfulness. See Bridge Oil Ltd. v. Emerald Reefer Lines, LLC, No. 06 Civ. 14226 (RLC) (RLE), 2008 WL 5560868, at *2 (S.D.N.Y. Oct. 27, 2008) (“Since Defendants have been entirely unresponsive, their continued failure is willful.”). Second, Defendants' failure to respond in the face of G&G's efforts to prosecute its claims demonstrates that failing to grant the Motion would prejudice G&G, “as there are no additional steps available to secure relief in this Court.” Id. Third, Defendants, having failed to file an answer, cannot establish a meritorious defense. See id.
Because all three factors have been satisfied, entry of default judgment is warranted.
B. Liability
Because their default equates to Defendants' concession of “all well-pleaded factual allegations of liability in the [C]omplaint, ” the question becomes whether G&G's allegations, accepted as true, establish Defendants' liability. 1400 Forest Ave., 2014 WL 4467774, at *5; see Cement & Concrete Workers Dist. Council Welfare Fund v. Metro Found. Contractors, Inc., 699 F.3d 230, 234 (2d Cir. 2012) (explaining that “a party's default is deemed to constitute a concession of all well-pleaded allegations of liability, ” but not “an admission of damages”) (quoting Greyhound Exhibit Group, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992)). The plaintiff has the burden of establishing its entitlement to recovery. See J & J Sports Prods., Inc. v. Ventura, No. 18 Civ. 2972 (VB) (LMS), 2019 WL 2451632, at *4 (S.D.N.Y. Jan. 30, 2019) (“On a motion for default judgment, the burden is on the plaintiff to establish an entitlement to recovery and a failure to plead sufficient facts may require the denial of the motion.”) (quoting J & J Sports Prods. v. Paucar, No. 17 Civ. 5358 (RJD) (VMS), 2018 WL 4501057, at *4 (E.D.N.Y. July 16, 2018)). In determining liability, the Court considers only the allegations in the Complaint, and not any additional information in post-default submissions. See Perez v. 50 Food Corp., 2019 WL 7403983, at *4.
In the Complaint, G&G sought to hold Defendants liable under sections 553 and 605 of the FCA. (ECF No. 1 fl 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 Civ. 4422 (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 Civ. 3177 (JS) (WDW), 2014 WL 917262, at *3 (E.D.N.Y. Mar. 10, 2014) (quoting J & J Sports Prods., Inc. v. Alvarez, No. 07 Civ. 8852 (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 [s]ection 605.” Innovative Sports Mktg., Inc. v. Aquarius Fuente De Soda, No. 07 Civ. 2561 (ENV) (CLP), 2009 WL 3173968, at *5 (E.D.N.Y. Sept. 30, 2009). Here, G&G has elected to seek damages under section 605 only, (see supra note 1), 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 Civ. 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); 1400 Forest Ave., 2014 WL 4467774, at *5 (evaluating liability and damages under section 605 only).
Section 605 of the FCA provides, as is 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”); Int'l Cablevision, Inc. v. 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. Prospect's liability
The Court finds that G&G's well-pleaded allegations establish that Prospect 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. (ECF No. 1 flfl 21, 24, 28). Defendants did not pay the $2,500 fee required of a business of Prospect's size to display the Program. (Id. fl 28). Instead, Prospect “intercepted and/or received the satellite communication of the Program” and illicitly shared the Program with its patrons. (Id. flfl 30-31).
Although G&G has not alleged “the precise method” by which Prospect obtained unauthorized access to the Program, 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 [E]vent.” Chulitas, 2014 WL 917262, at *3; see J & J Sports Prods., Inc. v. Onyx Dreams Inc., No. 12 Civ. 5355 (SLT) (LB), 2013 WL 6192546, at *3 (E.D.N.Y. Nov. 26, 2013) (explaining that “section 605 applies to the theft of a radio communication whether or not the radio communication is thereafter sent out over a cable network”). (See ECF No. 1 fl 24 (“[Transmission of the Program was electronically coded or ‘scrambled.' In order for the signal to be received and telecast clearly, it had to be decoded with electronic decoding equipment. The Program originated via satellite uplink[.]”)).
Accordingly, given Prospect's default, and the Court's obligation to accept G&G's well-pleaded allegations as true, G&G has adequately demonstrated that Prospect is liable under section 605.
2. Mr. Jimenez's liability
G&G also seeks to hold Mr. Jimenez liable as the owner and operator of Prospect. (ECF No. 1 fl 8). 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 Civ. 2823 (SMG), 2011 WL 6371521, at * (E.D.N.Y. Dec. 20, 2011) (citation omitted).
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).
G&G alleges that Mr. Jimenez, on the date of the Program, was the owner and principal of Prospect, and “had the obligation to supervise the activities” in the establishment, and “specifically directed the employees.” (ECF No. 1 flfl 9-14). G&G also alleges that Mr. Jimenez “had an obvious and direct financial interest in the activities of Prospect, ” including the “unlawful interception, receipt, and publication” of the Program. (Id. fl 15). These allegations demonstrate that Mr. Jimenez had both “supervisory control” over Prospect, and “a direct financial interest in its showing of the [Program].” 1400 Forest Ave., 2014 WL 4467774, at *6. They are therefore sufficient to establish Mr. Jimenez'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); J & J Sports Prods., Inc. v. Mangos Steakhouse & Bakery, Inc., No. 13 Civ. 5068 (RJD) (CLP), 2014 WL 2879868, at *5 (E.D.N.Y. May 7, 2014), adopted by, 2014 WL 2879890 (E.D.N.Y. June 24, 2014).
G&G has therefore established both Defendants' liability under section 605 of the FCA.
C. Damages
“Where liability is found under [s]ection 605(a) of the [FCA], a plaintiff may elect to recover either actual damages under [s]ection 605(e)(3)(C)(i)(I), or statutory damages under [s]ection 605(e)(3)(C)(i)(II)"3 Fantasy Bar and Rest. Corp., 2018 WL 5018065, at *3. G&G has elected to request statutory damages under section 605 in the amount of $30,000 plus pre- and post-judgment interest. (ECF No. 16).
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 [s]ection 605(a), as per [s]ection 605(e)(3)(C)(i)(II).” Fantasy Bar and Rest., 2018 WL 5018065, at *4. G&G may also 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. (ECF Nos. 1 fl 37; 16 at 3; 21 at 13).
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).
1. Statutory Damages
As noted above, (see supra § II.B), “[u]nder New York law . . . courts look to approved awards in similar cases as guideposts in fashioning appropriate damage awards.” Consorti, 103 F.3d at 4. As such, this Court has considered similar awards in cases involving claims arising under section 605 made by similarly situated plaintiffs. In Fantasy Bar and Restaurant, in which the plaintiff was also a California closed-circuit program distributor suing a Bronx sports bar under section 605, the court noted that a determination of what is “just” may happen in one of two ways: “[t]he 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.” Id. at *4.
Courts in this District have regularly elected to award a flat sum. See Fantasy Bar and Rest., 2018 WL 5018065, at *4 (citing J&J Sports Prods., Inc. v. Sugar Cafe, Inc., No. 17 Civ. 05350 (RA), 2018 WL 324266, at *1 (S.D.N.Y. Jan. 5, 2018) (awarding $2,000 in statutory damages, which also was the amount the plaintiff would have charged the defendant for a sub-license)); Kingvision Pay-Per-View, Ltd. v. Zalazar, 653 F.Supp.2d 335, 341 (S.D.N.Y. 2009) (setting the base statutory damages at the same level as the sub-licensing fee); Garden City Boxing Club, Inc. v. DeBlasio, No. 02 Civ. 06669 (GEL) (JCF), 2003 WL 22144395, at *4 (S.D.N.Y. Sept. 8, 2003) (awarding a flat sum of $5,000); Phillips, 2007 WL 2030285, at *4-5 (explaining the two approaches and awarding $3,000 in statutory damages, which was more than the sub-license fee but less than the $10,000 threshold).
“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.” Fantasy Bar & Rest., 2018 WL 5018065, at *4. Courts employing this approach have typically 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 Sugar Cafe, 2018 WL 324266, at *1 (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”). Because statutory damages should reflect “the greater of two numbers, ” the second approach is not appropriate in this case. Here, G&G alleges that Defendants illicitly showed the Program on one occasion to between ten and twelve patrons. (ECF No. 1 ¶ 26). Even accepting the higher number, multiplied by $50, the total owed under a per-patron approach would be $600. This is below the statutory minimum, far less than the $2,500 licensing fee (see ECF No. 1 ¶ 28), and therefore an inadequate method to calculate the damages award for G&G.
Accordingly, the Court finds that the flat fee approach to statutory damages is appropriate in this case. As the court noted in Pacheco concerning G&G, “although the Court enjoys discretion to award a sum different from the amount of the licensing fee, it is not persuaded at this time to do so and to depart from the established approaches; therefore, a statutory damages award of $2,500 is appropriate here.” Pacheco, 2021 WL 4296649, at *3 (citing G&G Closed Cir. Events, LLC v. Sanchez Torres, No. 20 Civ. 3487 (RA), 2021 WL 101200, at *3 (S.D.N.Y. Jan. 11, 2021) (awarding statutory damages equal to the licensing fee)); G&G Closed Cir. Events, LLC v. Batista, No. 20 Civ. 5073 (NRB), 2021 WL 293150, at *2 (S.D.N.Y. Jan. 28, 2021) (same).
2. Enhanced Damages
Next, the Court must consider G&G's request for $22,500 in enhanced damages for a willful violation under section 605(e)(3)(C)(ii). (ECF No. 16 at 3). “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 Civ. 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 (citation omitted).
Here, G&G has not alleged that Defendants have made repeated violations, shown that they made substantial monetary gains at G&G's expense, described significant actual damages beyond the $2,500 unpaid licensing fee, or supplied evidence that Defendants advertised the event, charged a cover fee, or charged higher food and drink prices on September 16, 2017. See J & J Sports Prods., Inc. v. Silvestre, No. 18 Civ. 3731 (PGG) (JLC), 2019 WL 179810, at *4 (S.D.N.Y. Jan. 14, 2019) (collecting cases in which courts awarded enhanced damages where establishments imposed cover charges), adopted by 2019 WL 3297080 (S.D.N.Y. July 22, 2019); J & J Sports Prods., Inc. v. Ramirez, No. 17 Civ. 6926 (RWS), 2018 WL 1961107, at *2 (S.D.N.Y. Apr. 9, 2018) (listing factors courts consider in awarding enhanced damages, including repeated violations, defendant's advertising of the event, and collection of cover charge). On the other hand, G&G does allege that “the violation was committed willfully and for purposes of direct or indirect commercial advantage.” Fantasy Bar and Rest., 2018 WL 5018065, at *4. (See ECF No. 1 ¶¶ 14, 17). Although G&G has not specified the mechanism by which Defendants unlawfully intercepted transmission of the Program, it is sufficient to establish willfulness that Defendants transmitted the Program on a closed-circuit broadcast (ECF No. 1 ¶ 24), which Defendants could only have obtained through “a deliberate act.” 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.”). For that reason, enhanced damages in an amount three times the amount of base damages are appropriate. See Pacheco, 2021 WL 4296649, at *4 (“In line with recent precedent, a more appropriate award against these defendants, who are not alleged to be recidivist offenders, would be damages equal to the licensing fee plus three times that amount in enhanced damages.”) (quoting G&G Closed Cir. Events, LLC v. Batista, No. 20 Civ. 5073 (NRB), 2021 WL 293150, at *2 (S.D.N.Y. Jan. 28, 2021)); Joe Hand Promotions, Inc. v. Batista, No. 20 Civ. 6460 (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). Awarding treble damages also “helps address [any] concerns about deterrence.” Pacheco, 2021 WL 4296649, at *4 (citation omitted).
Accordingly, I respectfully recommend that an award of enhanced damages is appropriate in this case, in the amount of $7,500 (three times $2,500).
D. Interest
G&G seeks an award of pre-judgment interest. (ECF No. 16 at 3). “Although no statute authorizes an award of pre-judgment interest for violations of [s]ections 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)). Likewise, 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 for two reasons. First, 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 Joe Hand Promotions, Inc. v. Marius, No. 05 Civ. 8472 (DAB) (THK), 2007 WL 2351065, at *5 (S.D.N.Y. July 3, 2007) (finding that “an award of prejudgment interest would result in a windfall, since Plaintiff was not deprived of the use of funds equivalent to the statutory damages being awarded” and recommending denial of pre-judgment interest). Second, “New York law does not award pre-judgment interest on punitive damages, and damages under [section] 605 are ‘analogous to punitive damages in that they are designed to deter others from similar infringing activity.'” Garden City Boxing Club, Inc. v. Guerra, No. 05 Civ. 3712 (SLT) (SMG), 2007 WL 539156, at *5 (E.D.N.Y. Feb. 16, 2007) (quoting Kingvision Pay-Per-View Ltd. v. Olivares, No. 02 Civ. 6588 (JES) (RLE), 2004 WL 744226, at *5 (S.D.N.Y. Apr. 5, 2004)). Accordingly, I respectfully recommend that G&G's request for prejudgment interest be denied.
G&G also seeks an award of post-judgment interest. (ECF No. 16 at 3). The applicable federal statute provides that “[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court . . . calculated from the date of entry of judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding . . . the date of the judgment. 28 U.S.C. § 1961. The Second Circuit has explained that an award of post-judgment interest is mandatory. See Schipani v. McLeod, 541 F.3d 158, 165 (2d Cir. 2008). Given the mandatory nature of post-judgment interest, I respectfully recommend that post-judgment interest be awarded pursuant to 28 U.S.C. § 1961(a).
E. Attorneys' Fees
G&G seeks an award of attorneys' fees in the amount of $1,755. (ECF No. 30 at 4). The billing records G&G has submitted are not contemporaneous, but rather were “reconstructed via review of the files themselves.” (ECF Nos. 30 at 2; 31 ¶ 6). 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).” (ECF No. 30 at 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 3 (citing Joe Hand Promotions, Inc. v. Albright, No. Civ. 11-2260 (WBS) (CMK), 2013 WL 4094403 (E.D. Cal. Aug. 13, 2013))).
As an initial matter, the Court notes that G&G's arguments are verbatim the same three arguments an FCA plaintiff (who was also represented by Loughlin) 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. 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”)). The Court finds it notable that, despite having been put on notice in 2019 by the court's decision in Silvestre that the lack of contemporaneous records would preclude an award of attorneys' fees, G&G's counsel has nevertheless maintained the same deficient time recording practices, and yet again took the chance by submitting noncontemporaneous records.
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.
Unlike in Silvestre, 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 also finds persuasive and applicable the court's rationale in Silvestre for rejecting each of the same arguments that G&G advances here, see Silvestre, 2019 WL 179810, at *5-6. The Court therefore recommends that, in 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.
F. Costs
G&G also seeks an award of costs in the amount of $1,246.88. (ECF No. 32 (“Proposed Judgment”)). The records G&G has submitted include receipts that substantiate $846.88 of this amount as consisting of (i) $650 in investigator fees; and (ii) $196.88 in process server fees. (ECF No. 31 at 8-12). Although G&G does not so specify, the Court infers that the remaining $400 in costs it seeks refers to the fee for filing this action in this Court.
The $400 filing fee is reflected on the Court's docket (ECF No. 1), and G&G has provided invoices for the process server fees. (ECF No. 31 at 10-12). 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 fee).
As to the investigator fees, “courts in this District have declined to award such costs.” Silvestre, 2019 WL 179810, at *7; see J & J Sports Prods., Inc. v. Garcia, No. 06 Civ. 4297 (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, (ECF No. 30 at 3-4), just as it did in Silvestre, without success. See Silvestre, 2019 WL 179810, at *7. In the case from the Eastern District of New York on which G&G now relies, Autar, 426 F.Supp.2d at 59, the court explained that to recover investigator fees, “a plaintiff must make a showing similar to that required to recover attorneys' fees.” Id. at 67 (explaining that plaintiff seeking to recover investigator fees must show the investigator's time, hourly rate, and qualifications). Here, as in Autar and Silvestre, however, G&G “has failed to provide the same required information about the investigator expenses, and accordingly should not be awarded those costs.” Silvestre, 2019 WL 179810, at *7; see Garcia, 2011 WL 1097538, at *6 (declining to award investigator fees where plaintiff did not provide required information, even if permitted by section 605(e)(3)(B)(iii)).
Accordingly, I recommend that G&G be awarded $596.88 in costs, reflective of the process server and court filing fees, only.
V. CONCLUSION
For the reasons set forth above, the Court respectfully recommends that G&G's Fee Motion be GRANTED IN PART and DENIED IN PART, and that G&G be awarded: (i) $2,500 in statutory damages pursuant to section 605(e)(3)(C)(i)(II); (ii) $7,500 in enhanced damages pursuant to section 605(e)(3)(C)(ii); (iii) costs in the amount of $596.88 pursuant to section 605(e)(3)(B)(iii); and (iv) post-judgment interest pursuant to 28 U.S.C. § 1961.
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 to file written objections 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 (14) days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections, and any response to objections, shall be filed with the Clerk of the Court. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), (d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Engelmayer.
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), (d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).