Opinion
EP-00-CA-161-DB
February 8, 2001
DEFAULT JUDGMENT
On this day, the Court considered Plaintiff Prostar's "Motion for Default, " "Affidavit in Support of Request for Default," "Statement for Judgment," and "Motion for Permission to Appear Telephonically at the Pretrial Conference and Default Hearing Scheduled for February 15, 2001," all filed on January 29, 2001, in the above-captioned cause. Defendants filed no responses.
Through the instant motions and supporting documents, Plaintiff moves for default judgment against Defendants Javier Valles, individually and doing business as Bobby's Place, as well as Bobby's Place; Feliciano Valdez and Maria Rivera, individually and doing business as Jockey Lounge, as well as Jockey Lounge; and William E. Dahlberg, individually, and as an officer, director, shareholder and/or principal of Yellow Rose Restaurants, Inc., doing business as The Mine Shaft, as well as Yellow Rose Restaurants, Inc., doing business as The Mine Shaft. After due consideration, the Court is of the opinion that the Motion for Default should be granted as provided below. Additionally, because the Court finds that no hearing is needed in this cause, Plaintiffs "Motion for Permission to Appear Telephonically at the Pretrial Conference and Default Hearing Scheduled for February 15, 2001," should be denied as moot.
Background
Plaintiff, by contract, owned commercial rights to distribute, for a fee, the televised version of the professional boxing match between Oscar DeLaHoya and Wilfredo Rivera, which took place on December 6, 1997, via encrypted satellite signal. Plaintiff alleges that Defendants, without purchasing the right to intercept and exhibit the encrypted signal, nonetheless exhibited the boxing match.
On the day of the match, Plaintiff employed investigators whom it supplied with lists of locations within Texas authorized to exhibit the program. Investigators were to visit, during the transmission of the boxing match, commercial establishment not named on the list and later submit affidavits verifying the exhibition of the boxing program at locations not authorized to so exhibit. Three investigators subsequently submitted affidavits alleging that the boxing match was exhibited at all three commercial establishments named in this cause of action, and that one establishment, The Mine Shaft, charged customers a $10.00 entry fee (a "cover charge").
Plaintiff commenced this action on May 30, 2000, alleging Defendants unlawfully intercepted and exhibited commercially Plaintiffs satellite cable programming, in violation of Section 705 of the Communications Act of 1934, 47 U.S.C. § 605 ("the Communications Act"). Plaintiff contends that Defendants intercepted the satellite signal and displayed the program willfully and for the purpose of direct or indirect commercial advantage or private financial gain. Accordingly, Plaintiff seeks statutory damages for willful violation of 47 U.S.C. § 605, as well as costs and reasonable attorney's fees. Although Plaintiff duly served copies of a summons and the Complaint on all Defendants, Defendants have failed to appear, answer or otherwise defend against the Complaint.
Discussion
Plaintiff moves for Default Judgment pursuant to Federal Rule of Civil Procedure 55(b)(2), which provides that a party entitled to a default judgment may apply to the Court therefor. Plaintiff seeks maximum statutory damages in the amount of $110,000, for willful violation of 47 U.S.C. § 605 (a). In general, statutory damages should not be awarded by default judgment unless the Court has a hearing or is provided with detailed affidavits establishing the necessary facts and that the amount claimed is a liquidated sum or one capable of mathematical calculation. See United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979). Statutory damage awards serve both a compensatory and punitive function. Hence, "in making a statutory award, the court may consider the likelihood of profits and losses and may take into account the attitude and conduct of the parties." Warner Bros. Inc., v. Dae Rim Trading, Inc., 877 F.2d 1120, 1126 (2d Cir. 1989) (copyright infringement case).
The Court finds that a hearing in this case is unnecessary given the ample supporting documents and affidavits supplied by Plaintiff.
Title 47 U.S.C. § 605 prohibits the unauthorized publication of any intercepted radio communication, including satellite cable programming. Section 605(a) provides:
[N]o person receiving, assisting in receiving, transmitting, or assisting in transmitting, any interstate or foreign communication by wire or radio shall divulge or publish the existence, contents, substance, purport, effect, or meaning thereof, except through authorized channels of transmission or reception, (1) to any person other than the addressee, his agent, or attorney, (2) to a person employed or authorized to forward such communication to its destination. . . .47 U.S.C.A. § 605 (West 1991). The statute's prohibition of the unauthorized interception and disclosure of radio communications is also applicable to communications transmitted by means of new technology, including domestic satellite transmissions. See, e.g., United States v. Herring, 933 F.2d 932, 937 (11th Cir. 1991).
Under the Communications Act, an aggrieved party has a private right of action for injuries arising from violation of § 605. See 47 U.S.C. § 605 (e)(3)(A) (West 1991). The Court may award statutory damages for each violation in a sum of not less than $1,000 or more than $10,000, "as the court considers just." Id. § 605(e)(3)(C)(i)(II). If the Court finds that the violation was committed willfully and for purposes of commercial advantage, the Court in its discretion may increase the award of damages in an amount not to exceed $100,000 for each violation See id. § 605(e)(3)(C)(ii). The Supreme Court has defined "willful" in the context of civil statutes as conduct showing "disregard for the governing statute and an indifference to its requirements," Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 127, 105 S.Ct. 613, 625, 625, 83 L.Ed.2d 523 (1985), and courts have interpreted the Communications Act consistently with that definition. See, e.g., ON/TV of Chicago v. Julien, 763 F.2d 839, 844 (7th Cir. 1985) (interpreting "willfulness" under § 605 as defined in Trans World Airlines). For purposes of § 605, Courts have found conduct "willful" where there were repeated violations over a period of time, or where there was a sophisticated knowledge of the satellite programming industry and violation of the statutes which regulate it. See, e.g., Cable/Home Communication Corp. v. Network Prod., 902 F.2d 829, 851 (11th Cir. 1990); Home Box Office v. Champs of New Haven, Inc., 837 F. Supp. 480, 484 (D. Conn. 1993).
Here, although Plaintiff asks for maximum damages, the Court finds that awarding the highest statutory damages is inappropriate as to all Defendants. Plaintiff has provided no documentation or other competent evidence showing any significant actual damages or, conversely, substantial unlawful monetary gains by Defendants — except as to Defendant Dahlberg, whose establishment collected a cover charge from patrons. The caselaw suggests that under similar circumstances and in the absence of egregious violations, courts have refused to award the highest possible damages. See, e.g., Home Box Office, 837 F. Supp. at 484 (holding that under the Communications Act and Copyright Act, maximum statutory damages in amount of $250,000 imposed on owner of sports bar was excessive and would be reduced to $10,000 where there were no allegations of repeated violations, substantial gains by defendants or significant actual damages to the plaintiff); see also Joe Hand Promotions v. Burg's Lounge, 955 F. Supp. 42 (E.D. Pa. 1997) (holding that in the absence of evidence suggesting especially egregious circumstances under which tavern owners exhibited copyright broadcast of heavyweight boxing fight without authorization, $20,000 damage award was unwarranted). Inasmuch as the amount of statutory damages under § 605 is discretionary, the Court finds that the appropriate amount of statutory damages under the circumstances presented is $5,000 as to each Defendant.
Plaintiff also seeks damages based on Defendants' "committ[ing] [the alleged act] willfully and for purposes of direct or indirect commercial advantage or private financial gain, " pursuant to § 605(e)(3)(C)(ii). Given that all Defendants exhibited the boxing match in commercial establishments, they were sure to benefit financially from the unauthorized interception of the satellite transmission. Moreover, the Court finds that an award under this section of the statute is warranted insofar as Defendants acted in disregard or with indifference to the governing laws. While Defendants may not have been well-versed in the statutory restrictions on the unauthorized interception of satellite transmissions, the Court finds that there must have been some knowledge on the part of Defendants that such interception could not be had for free. The Court, however, is unwilling to make an award at the statutory maximum of $100,000. All three Defendants run small establishments and, as noted above, likely are not familiar with statutory requirements of satellite broadcasting. Cf Network Prod., 902 F.2d at 851 (awarding $20,000 for multiple, willful violations of Copyright Act and $110,000 for separate willful violations of the Communications Act where the defendant flagrantly violated statutory requirements with which he was familiar given his knowledge of the industry). In this case, the Court is of the opinion that an award of $10,000 will further the goal of deterrence without putting Defendants out of business. As to Defendant Dahlberg, however, who benefitted from the enterprise more significantly than co-Defendants by collecting from patrons a $10.00 entree fee, the Court is of the opinion that an award of $25,000 is appropriate.
Plaintiff also seeks $1,500 per Defendant as reasonable attorney fees the total sum based on an hourly rate of $150. Additionally, Plaintiff seeks to recover the costs of bringing suit, which include a $50 filing fee and a $160 process-server fee for each Defendant. The Court finds this accounting reasonable and is of the opinion that Plaintiff is entitled to such an award. See, e.g., Time Warner Cable of New York City v. Olmo, 977 F. Supp. 585 (E.D.N.Y. 1997) (awarding prevailing party, a cable television operator, reasonable costs and attorney fees in the amount of $1,586 based on hourly rates ranging from $190 to $110). Plaintiff also requests prejudgment interest at the rate of six percent per annum as compensation for lost use of the money due as damages during the lapse of time between the accrual of the claim and the date of judgment. Plaintiff finally requests post-judgment interest at Ihe legal rate in effect at the time of the judgment. The Court is of the opinion that Plaintiffs request is reasonable and agrees to the proposed award. See Williams v. Trader Pub. Co., 218 F.3d 481 (5th Cir. 2000) (holding that "[a] district court has discretion to impose a pre- and post-judgment interest award to make a plaintiff whole").
Accordingly, after due consideration, the Court is of the opinion that the following orders should enter:
IT IS HEREBY ORDERED that Plaintiff Prostar's Motion for Default Judgment is GRANTED.
IT IS FURTHER ORDERED that Plaintiff recover from Defendant Javier Valles individually and doing business as Bobby's Place as well as Bobby's Place: (1) statutory damages in the amount of $5,000 pursuant to 47 U.S.C. § 605 (e)(3)(C)(i)(II); (2) additional damages in the amount of $10,000 for "committ[ing] [the alleged act] willfully and for purposes of direct or indirect commercial advantage or private financial gain," pursuant to 47 U.S.C. § 605 (e)(3)(C)(ii); (3) interest thereon at the rate of 6 percent per annum on the sum of $15,000 from the 6th day of December, 1997, to the 8th day of February, 2001, in the amount of $2,850; (4) $1,500 as reasonable attorney's fees; (5) court costs related to prosecution of this matter totaling $210; and (6) post-judgment interest thereon at the rate of 6.052 percent per annum.
IT IS FURTHER ORDERED that Plaintiff shall recover from Defendants Feliciano Valdez and Maria Rivera, individually and doing business as Jockey Lounge, as well as Jockey Lounge: (1) statutory damages in the amount of $5,000 pursuant to 47 U.S.C. § 605 (e)(3)(C)(i)(II); (2) additional damages in the amount of $10,000 for "committ[ing] [the alleged act] willfully and for purposes of direct or indirect commercial advantage or private financial gain," pursuant to 47 U.S.C. § 605 (e)(3)(C)(ii); (3) interest thereon at the rate of 6 percent per annum on the sum of $15,000 from the 6th day of December, 1997, to the 8th day of February, 2001, in the amount of $2,850; (4) $1,500 as reasonable attorney's fees; (5) court costs related to prosecution of this matter totaling $210; and (6) post-judgment interest thereon at the rate of 6.052 percent per annum.
IT IS FURTHER ORDERED that Plaintiff shall recover from Defendant William E. Dahlberg, individually, and as an officer, director, shareholder and/or principal of Yellow Rose Restaurants, Inc., doing business as The Mine Shaft, as well as Yellow Rose Restaurants, Inc., doing business as The Mine Shaft: (1) statutory damages in the amount of $5,000 pursuant to 47 U.S.C. § 605 (e)(3)(C)(i)(II); (2) additional damages in the amount of $25,000 for "committ[ing] [the alleged act] willfully and for purposes of direct or indirect commercial advantage or private financial gain," pursuant to 47 U.S.C. § 605 (e)(3)(C)(ii); (3) interest thereon at the rate of 6 percent per annum on the sum of $35,000 from the 6th day of December, 1997, to the 8th day of February, 2001, in the amount of $5700; (4) $1,500 as reasonable attorney's fees; (5) court costs related to prosecution of this matter totaling $210; and (6) post-judgment interest thereon at the rate of 6.052 percent per annum.
IT IS FURTHER ORDERED that the pretrial conference and default hearing set for February 15, 2001, is hereby VACATED.
IT IS FINALLY ORDERED that Plaintiff's "Motion for Permission to Appear Telephonically at the Pretrial Conference and Default Hearing Scheduled for February 15, 2001" is DENIED as moot.