Opinion
00 Civ. 2897 (KMW) (HBP).
December 12, 2000.
OPINION AND ORDER
I. Introduction
Plaintiff moves to amend its complaint and to strike defendants' demand for a jury. For the reasons set forth below, the motion to amend the complaint is granted; the motion to strike the jury demand is denied.
II. Facts
Plaintiff is a cable television operator, franchised to maintain and operate cable television systems in parts of Kings, Queens and New York Counties.
In substance, plaintiff alleges that defendants illegally intercepted its programming through the use of unauthorized descrambling devices and thereby misappropriated plaintiff's services.
As initially filed, the complaint asserted claims under the pertinent provisions of the Communications Act of 1934, as amended, 47 U.S.C. § 553(a)(1) and 605(a) (the "Communications Act") and the New York Public Service Law § 225(6). Plaintiff now seeks to amend its complaint to withdraw the claim under the Public Service Law.
Plaintiff further states in its papers that it is waiving its right to seek any relief other than (1) injunctive relief; (2) statutory damages, and (3) attorney's fees. Plaintiff argues that there is no right to a jury trial for any of these forms of relief and that defendants' right to a jury trial will, therefore, be extinguished if plaintiff is permitted to drop its claim under the Piblic Service Law. Accordingly, plaintiff argues that defendants' jury demand should be stricken.
III. Analysis
A. Motion to Amend
The standards applicable to a motion to amend are well settled and require only brief review. Leave to amend a pleading should be freely granted when justice so requires. Fed.R.Civ.P. 15(a);Foman v. Davis, 371 U.S. 178, 182 (1962); Dluhos v. The Floating Abandoned Vessel. Known as "New York", 162 F.3d 63, 69 (2d Cir. 1998); Gumer v. Shearson, Hammill Co., 516 F.2d 283, 287 (2d Cir. 1974). "Nonetheless, the Court may deny leave if the amendment (1) has been delayed unduly, (2) is sought for dilatory purposes or is made in bad faith, (3) the opposing party would be prejudiced, or (4) would be futile." Lee v. Regal Cruises, Ltd., 916 F. Supp. 300, 303 (S.D.N.Y. 1996), aff'd, 116 F.3d 465 (2d Cir. 1997). Accord American Home Assurance Co. v. Jacky Maeder (Hong Kong) Ltd., 969 F. Supp. 184, 187-88 (S.D.N.Y. 1997). Delay alone, in the absence of bad faith or prejudice, is usually not sufficient reason for denying a motion to amend. Rachman Bag Co. v. Liberty Mut. Ins. Co., 46 F.3d 230, 234-35 (2d Cir. 1995);State Teachers Ret. Bd. v. Fluor Corp., 654 F.2d 843, 856 (2d Cir. 1981); Middle Atlantic Utils. Co. v. S.M.W. Dev. Corp., 392 F.2d 380, 384 (2d Cir. 1968). The Court of Appeals has repeatedly noted that the trial court has "broad" discretion in ruling on a motion to amend. Local 802, Associated Musicians v. Parker Meridien Hotel, 145 F.3d 85, 89 (2d Cir. 1998); Krumme v. Westpoint Stevens Inc., 143 F.3d 71, 88 (2d Cir.), cert. denied, 525 U.S. 1041 (1998). See generally Grace v. Rosenstock, 228 F.3d 40, 53-54 (2d Cir. 2000).
The amendment proposed by plaintiff is the withdrawal of one of its two claims for relief — an amendment that narrows the scope of the case. The sole basis for defendants' opposition is that this amendment may deprive it of a right to a jury trial that it would enjoy under the pendent state law claim. However, the effect of an amendment to a complaint on a party's right to trial by jury is immaterial to the issue of whether the amendment should be granted. People v. 11 Cornwell Co., 695 F.2d 34, 43 (2d Cir. 1982) (withdrawal of legal claim eliminates right to trial by jury), vacated on other grounds, 718 F.2d 22 (2d Cir. 1983) (en banc); Francis v. Dietrick, 682 F.2d 485, 486-87 (4th Cir. 1982) (same); Stonewall Ins. Co. v. National Gypsum Co., 86 Civ. 9671 (JSM), 1992 WL 281401 at *1 (S.D.N.Y. Sept. 25, 1992) (same); Robine v. Apco, Inc., 227 F. Supp. 512, 516-17 (S.D.N Y 1964), aff'd, 386 F.2d 267 (2d Cir. 1967) (same); Nolan v. Columbia Broad. Sys., Inc. 11 F.R.D. 194, 195 (S.D.N.Y. 1951) (permitting amendment that gave rise to right to trial by jury).
Since the amendment will narrow the scope of the trial and causes no cognizable prejudice to defendants, plaintiff's motion to amend is granted.
B. Motion to Strike Jury Demand
The next aspect of plaintiff's motion is more difficult.
The parties do not dispute that there is no right to a jury trial on plaintiff's claims for injunctive relief and attorney's fees. The parties' sole dispute is whether there is a right to a jury with respect to plaintiff's claim for statutory damages.
There is a split of authority on the issue of whether there is a right to a trial by jury in an action seeking statutory damages for the illegal interception of cable television signals. Four district courts have held that there is a right to a trial by jury in such cases. National Satellite Sports, Inc. v. Cotter's Lounge, Inc., 88 F. Supp.2d 1024, 1027 (E.D. Mo. 2000); National Satellite Sports, Inc. v. No Frills Rest., Inc., 15 F. Supp.2d 1360, 1364 (S.D. Fla. 1998); Joe Hand Promotions, Inc. v. Blarney Stone, 995 F. Supp. 577, 578-80 (E.D. Pa. 1998); General Instrument Corp. v. Nu-Tek Elecs. Mfg. Inc., 93-CV-3854, 1996 WL 184794 (E.D. Pa. April 12, 1996). An equal number of district courts have reached the opposite result. National Satellite Sports, Inc. v. Prashad, 76 F. Supp.2d 1359, 1362 (S.D. Fla. 1999); Joe Hand Promotions, Inc. v. Nekos, 18 F. Supp.2d 214, 217-18 (N.D.N.Y. 1998); Metrovision of Livonia, Inc. v. Wood, 864 F. Supp. 675, 679 n. 1 (E.D. Mich. 1994); Storer Cable Communications v. Joe's Place Bar Rest., 819 F. Supp. 593, 596 (W.D. Ky. 1993). The only court of appeals to have addressed the issue reached the conclusion that neither a bench trial nor a jury trial is required so long as there is some procedure for the parties to submit their evidence to the court. Cable/Home Communication Corp. v. Network Prods. Inc., 902 F.2d 829, 852-53 (11th Cir. 1990).
The first step in determining whether a right to a jury exists is to examine the face of the statute and its legislative history to determine if Congress expressed an intent to grant or deny the right to trial by jury. Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340, 345 (1998); Tull v. United States, 481 U.S. 412, 417 n. 3 (1987).
Every court that has considered whether the relevant provisions of the Communications Act or its legislative history express such an intent has concluded that neither shed any light on whether Congress intended that statutory damages be determined by a judge or a jury. National Satellite Sports, Inc. v. Cotter's Lounge, Inc., supra, 88 F. Supp.2d at 1025; National Satellite Sports, Inc. v. Prashad, supra, 76 F. Supp.2d at 1360; Joe Hand Promotions, Inc. v. Nekos, supra, 18 F. Supp.2d at 216; National Satellite Sports, Inc. v. No Frills Rest., Inc., supra, 15 F. Supp.2d at 1362; Joe Hand Promotions, Inc. v. Blarney Stone, supra, 995 F. Supp. at 579; General Instrument Corp. v. Nu-Tek Elecs. Mfg. Inc., supra, 1996 WL 184794 at *2; Storer Cable Communications v. Joe's Place Bar Rest., supra, 819 F. Supp. at 595. I agree with this array of authorities.
In the absence of an indication of congressional intent in the statute or in its legislative history, the second step is to determine whether a right to a jury trial is required by the Seventh Amendment of the Constitution. Feltner v. Columbia Pictures Television, Inc., supra, 523 U.S. at 347; Tull v. United States, supra, 481 U.S. at 417 n. 3. This second step, in turn, requires that I examine two factors. "First, [the court must] compare the statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity . . . . Second, [the court must] examine the remedy sought and determine whether it is legal or equitable in nature."Tull v. United States, supra, 481 U.S. at 417-18 (citations omitted).
The pertinent provisions of the Communications Act prohibit the theft of a cable television operator's service or, stated differently, the conversion of the operator's intangible property. Claims for conversion of personal property are legal claims for which there is a right to a trial by jury. Ross v. Bernhard, 396 U.S. 531, 533 (1970); Robine v. Ryan, 310 F.2d 797, 798-99 (2d Cir. 1962) (misappropriation of invention). Thus, the nature of an action brought for the theft of cable television service is closely akin to a traditional legal action.
In addition, I conclude that the nature of the remedy sought — statutory damages — is, at least in part, a traditional legal remedy.
First, the Supreme Court has "recognized the 'general rule' that monetary relief is legal," Feltner v. Columbia Pictures Television, Inc., supra, 523 U.S. at 352, and that a claim for such relief gives rise to a right to trial by jury.
Second, an award of statutory damages pursuant to the Communications Act is intended to address a traditionally legal object — punishment. One of the factors that courts routinely consider in assessing statutory damages is the defendants' willfulness, suggesting that punishment is one of the purposes of statutory damages. Columbia Cable TV Co. v. McCary, 954 F. Supp. 124, 128 (D.S.C. 1996); Home Box Office v. Carlim, Inc., 838 F. Supp. 432, 435 (E.D. Mo. 1993); Home Box Office v. Gee-Co Inc., 838 F. Supp. 436, 439 (E.D. Mo. 1993); H.R. Rep. No. 98-934, at 85, reprinted in 1984 U.S.C.C.A.N. 4655, 4722. Remedies aimed at punishment are legal remedies. Tull v. United States, supra, 481 U.S. at 422 ("Remedies intended to punish culpable individuals were issued by courts of law, not courts of equity."). Indeed, it is this punitive aspect of statutory damages that has led courts to conclude that statutory damages are a legal and not an equitable remedy. National Satellite Sports, Inc. v. Cotter's Lounge. Inc., supra, 88 F. Supp.2d at 1026-27; National Satellite Sports, Inc. v. No Frills Rest., Inc., supra, 15 F. Supp.2d at 1363; Joe Hand Promotions, Inc. v. Blarney Stone, supra, 995 F. Supp. at 580; General Instrument Corp. v. Nu-Tek Elecs. Mfg. Inc., supra, 1996 WL 184794 at *3.
The courts that have reached the opposite result have focussed on statutory damages as a vehicle for the award of restitutionary relief, a traditional equitable remedy. This conclusion is, no doubt, correct. However, there is no indication in the Communications Act or its legislative history that statutory damages were intended to address restitutionary interests to the exclusion of punitive interests or vice versa both punishment and restitutionary goals are properly considered in assessing statutory damages. Since the former is a legal remedy for which there is a right to a trial by jury while the latter is an equitable interest for which there is no countervailing "right" to a bench trial, 9 Charles A. Wright Arthur R. Miller, Federal Practice Procedure § 2317 (2d ed. 1995), trying this case to a jury will ensure that the right provided by the Seventh Amendment is recognized and enforced to the fullest extent possible while no rights justify the alternative course.
Thus, I find that defendants do have a right to a trial by jury on plaintiff's claim for statutory damages under the Communications Act and plaintiff's motion to strike defendants' jury demand is denied.
IV. Conclusion
Accordingly, for all the foregoing reasons, plaintiff's motion to amend the complaint is granted in all respects and its motion to strike defendants' jury demand is denied in all respects. Plaintiff is directed to serve and file its amended complaint within ten (10) days of the date of this Opinion and Order.