Opinion
C/A No.: 3:17-2413-MBS-SVH
10-01-2018
J&J Sports Productions, Inc., Plaintiff, v. 800 Grand Family, LLC, doing business as Skores, also known as Primetime Sports Bar and Grill; and Sandra F. Simpkins, Defendants.
REPORT AND RECOMMENDATION
Plaintiff J&J Sports Productions, Inc. ("Plaintiff") had exclusive, nationwide commercial television distribution rights to Floyd Mayweather, Jr. v. Andre Berto WBA/WBC Welterweight Championship Fight Program ("the Program") and sues defendant 800 Grand Family, LLC ("Grand Family"), d/b/a Skores, a/k/a Primetime Sports Bar and Grill (the "Establishment"), and its member, Sandra F. Simpkins ("Simpkins") (collectively "Defendants") for exhibiting the September 12, 2015, commercial broadcast of the Program, without paying the required licensing fee. [ECF No. 1 at ¶¶ 11-14]. Plaintiff alleges causes of action for conversion and violations of the Communications Act of 1934 (as amended, 47 U.S.C. § 605) and the Cable & Television Consumer Protection and Competition Act of 1992 (as amended, 47 U.S.C. § 553). [ECF No. 1].
All pretrial proceedings were assigned to the undersigned pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B) and Local Civ. Rule 73.02(B)(2)(e) (D.S.C.). Grand Family has not made a proper appearance in this court, and the court entered default against it on November 3, 2017. [ECF No. 13]. This matter is before the court on Plaintiff's motion for summary judgment filed August 3, 2018. [ECF No. 30]. As Simpkins is proceeding pro se, the court advised her pursuant to Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975) of the dismissal procedures and the possible consequences if she failed to respond adequately to the motion. [ECF No. 31]. The motion having been fully briefed [ECF Nos. 36, 39], it is ripe for disposition. I. Factual Background
Although the motion is titled as a motion for summary judgment, it notes that, as to Grand Family, it seeks only a determination of damages. [ECF No. 30-1 at ¶11].
Plaintiff was granted the exclusive commercial distribution rights to the Program. Plaintiff's distribution rights encompassed all undercard events as well as the main event and all color commentary. Gagliardi Affidavit ¶3. At all times relevant hereto, Grand Family was doing business as Skores a/k/a Primetime Sports Bar & Grill and Simpkins was the member of Grand Family. [ECF No. 30-4 at 9; 36-2 at ¶1]. The Program was exhibited at the Establishment, operating in Columbia, South Carolina, but Defendants did not pay a commercial licensing fee or otherwise have permission to broadcast the Program. Id. at 5; Gagliardi Affidavit ¶7. Simpkins stated in responses to Plaintiff's requests for admission that "based on information from [her nephew] Edward Simpkins, a residential cable television service was diverted into the Establishment." [ECF No. 30-4 at 7]. The commercial fee to broadcast the Program at a venue the size of the Establishment was $3,000. Gagliardi Affidavit at ¶8. The Program was observed being displayed at the Establishment on September 12, 2015, by its private investigator Carolyn Harding ("Investigator"). [ECF No. 30-3]. II. Discussion
A. Standard on a Motion for Summary Judgment
The court shall grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The movant bears the initial burden of demonstrating that summary judgment is appropriate; if the movant carries its burden, then the burden shifts to the non-movant to set forth specific facts showing that there is a genuine issue for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). If a movant asserts that a fact cannot be disputed, it must support that assertion either by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials;" or "showing . . . that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1).
In considering a motion for summary judgment, the evidence of the non-moving party is to be believed and all justifiable inferences must be drawn in favor of the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). However, "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Id. at 248.
B. Analysis
Plaintiff submits that it has established liability pursuant to 47 U.S.C. § 553 and seeks statutory damages. Plaintiff does not specifically address its claim pursuant to 47 U.S.C. § 605, likely because courts are split as to the applicability of this section to pirated programming involving cable services, as opposed to satellite services, at the delivery point. The Fourth Circuit has not addressed this issue and courts in this district have adopted the Seventh Circuit's position in United States v. Norris, 88 F.3d 462 (7th Cir. 1996), finding that 47 U.S.C. § 553, not 47 U.S.C. § 605, applied to the theft of cable services at the point of delivery. Columbia Cable TV Co., Inc. v. McCary, 954 F. Supp. 124 (D.S.C. 1996); see also J & J Sports Prods., Inc. v. Chef Tejano, LLC, C/A No. 0:11-2436-MBS, 2013 WL 353497, at *2 (D.S.C. Jan. 29, 2013). Statutory damages under 47 U.S.C. § 553 range from $250 to $10,000 for all violations and a maximum $50,000 enhancement for willfulness. 47 U.S.C. §§ 553(c)(3)(A)(ii), 553(c)(3)(B).
The undersigned finds Plaintiff has likewise established Defendants unlawful conversion of its distribution rights by broadcasting the Program without paying the $3000 license fee. However, because Plaintiff cannot recover damages under both its statutory claim and its state law conversion claim,the undersigned addresses Plaintiff's statutory damages claim as its preferred election. See Joe Hand Promotions, Inc. v. Flamingo's Food & Spirits, L.L.C., No. 0:11-2431-MBS, 2012 WL 2048192, at *2 (D.S.C. Jun. 5, 2012) ("[R]ecovery under both [the statute] and the tort of conversion would result in an impermissible double recovery for the same loss.").
Plaintiff seeks the maximum of $10,000 in statutory damages as needed to compensate Plaintiff for its damages and to deter future conduct.
According to the Investigator's affidavit, the Establishment has a capacity of 150 patrons. [ECF No. 30-3]. According to Plaintiff's Affidavit in Support of Motion for Summary Judgment, the rate card shows, based on a capacity of up to 150, that the charge for the license fee for the Program was $3,000. [ECF No. 30-2 at ¶8]. The court may award statutory damages between $250 to $10,000 in an amount "the court considers just." 47 U.S.C. § 553(c)(3)(A)(ii). Courts have used various methods of determining an appropriate amount of statutory damages. Some courts fashion an award by considering the number of patrons who viewed the programming, often multiplying that number by the cost of the residential fee for watching such programming. See Joe Hand Promotions, Inc. v. Veltsistas, LLC, No. 1:10CV1442 JCC/TRJ, 2011 WL 5826059, at *2 (E.D. Va. Oct. 21, 2011), report and recommendation adopted, No. 1:10CV1442 JCC/TRJ, 2011 WL 5826082 (E.D. Va. Nov. 18, 2011) (finding a "per patron" amount appropriate). Some courts base the statutory damages amount on an iteration of the licensing fee the violating establishment should have paid the plaintiff, and other courts award a flat amount for a violation. See e.g., J&J Sports Productions, Inc. v. Ultimate Jet-A-Way Sportsbar & Lounge, No. 4:17-CV-1038-RBH, 2018 WL 1709920, at *4 (D.S.C April 9, 2018) (finding the license fee plus cover charge appropriate amount as statutory damages); Kingston Pay-Per-View, Ltd. V. Gutierrez, 544 F. Supp. 2d 1179, 1184 (D. Colo. 2008), report and recommendation adopted as modified sub nom. Kingvision Pay-Per-View, Ltd. V. Valles-Salcedo, No. CIVA07CV00979RPMMEH, 2008 WL 583817 (D. Colo. Feb. 28, 2008) (finding a flat amount of $5,000.00 for defendant's violation appropriate).
The Investigator's affidavit indicates there was a $10 cover charge to enter the Establishment and she observed head counts of 20, 25, and 18 patrons on the three separate occasions she counted. [ECF No. 30-3]. The Program was playing on five televisions. Id.
The undersigned recommends statutory damages of $3250 be granted. Under the facts and circumstances, the undersigned finds that the amount of a license fee plus the gross profit, when combined with enhanced damages and attorneys' fees reflected below is just compensation and fair reflection of Plaintiff's damage.
2. Simpkins' Individual Liability
Although the Fourth Circuit has not addressed the standard for finding an individual vicariously liable for the actions of a corporation, courts in this district have held a plaintiff "must show that the corporate officer had a 'right and ability to supervise the violations, and that [she] had a strong financial interest in such activities.'" J & J Sports Productions, Inc. v. J.R. 'Z Neighborhood Sports Grille, Inc., C.A. No. 2:09-03141-DCN-RSC, 2010 WL 1838432, at * 2 (D.S.C. Apr.5, 2010) (additional citations omitted); Joe Hand Promotions, Inc. v. Upstate Recreation, No. 6:13-2467-TMC-JDA, 2015 WL 685461 at *7 (D.S.C. April 9, 2018). Here, although Simpkins clarified her initial admission that she was the owner of the Establishment to reflect that Grand Family was the owner of the Establishment, she admits that she is the member of Grand Family. See Simpkins Aff. at ¶¶1, 11. As a member (and perhaps the sole member) of Grand Family, Simpkins had the right and ability to supervise all activities at the Establishment and also had a strong financial interest in such activities. The undersigned recommends a finding that Simpkins is individually liable, jointly and severally with Grand Family, for the statutory damages of $3250.
3. Enhanced Statutory Damages
Plaintiff also seeks enhanced statutory damages, which requires a showing of willfulness. Edward Simpkins, manager of the Establishment, admits that he willfully diverted the Program into the Establishment. [ECF No. 36-2]. The undersigned is in agreement with other courts that have considered this issue "that a firm judicial hand is required to stop this predatory behavior, which is outright thievery, and to compensate the aggrieved appropriately." J & J Sports Prods., Inc. v. J.R. 'Z Neighborhood Sports Bar & Grille, C/A No. 2:09-3141-DCN-RSC, 2010 WL 1838432, *2 (D.S.C. April 5, 2010). Consequently, the undersigned finds that an enhanced award is necessary to deter the willful piracy of Plaintiff's programs. Grand Family, as owner of the Establishment, unlawfully exhibited the Program. This type of piracy could provide Grand Family with an unfair competitive advantage and harm Plaintiff by making it less likely that competitors will purchase such programs. The court finds that enhanced damages in the amount of three times the basic statutory damages, or $9750, provides just and adequate deterrence for willful violations and should be awarded against Grand Family. The undersigned does not recommend imposing enhanced damages on Simpkins because they "are not true damages, but rather penalties aimed to deter and which depend on willfulness, whereas the 'right and ability to supervise' standard does not even require knowledge." Joe Hand Promotions, Inc. v. Yakubets, 3 F.Supp.3d 261, 302 (E.D. Penn. 2014).
The Yakubets court noted that the Supreme Court has not "interpreted what 'willfully' requires under . . . 47 U.S.C. § 605(e)(3)(C) (ii)," but concluded based on Supreme Court precedent, similarities with the criminal provision of the statute, and the legislative history that willfulness under § 553 "requires intent and either knowledge of or reckless disregard for the illegality of the conduct, and not mere negligence." Id. at 282-83.
4. Attorneys' Fees
The statute also states that the court may "direct the recovery of full costs, including awarding reasonable attorneys' fees to an aggrieved party who prevails." 47 U.S.C. § 553(c)(2)(C). Pursuant to Fed. R. Civ. P. 54(d), Plaintiff requests that it be granted 14 days from the entry of judgment to submit its request for costs and attorneys' fees. The undersigned recommends granting Plaintiff's request for attorneys' fees and directs Plaintiff to file an affidavit of its attorneys' fees within 14 days of this report and recommendation. III. Conclusion and Recommendation
For the foregoing reasons, the undersigned recommends Plaintiff's motion [ECF No. 30] be granted, (1) awarding Plaintiff general statutory damages of $3250 jointly and severally against defendants Simpkins and Grand Family; (2) awarding enhanced damages of $9750 against Grand Family; and (3) granting attorneys' fees to Plaintiff in an amount to be determined by affidavit filed within 14 days of this report and recommendation for the district judge's consideration. Plaintiff's bill of costs may be filed in compliance with Local Civ. R. 54.03 (D.S.C.).
IT IS SO RECOMMENDED. October 1, 2018
Columbia, South Carolina
/s/
Shiva V. Hodges
United States Magistrate Judge
The parties are directed to note the important information in the attached
"Notice of Right to File Objections to Report and Recommendation."
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. "[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must 'only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'" Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed. R. Civ. P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); see Fed. R. Civ. P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
901 Richland Street
Columbia, South Carolina 29201
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).