United States District Court, Southern District of New York
March 27, 2003
TOP RANK, INC., PLAINTIFF,
FREDDIE ORTIZ, D/B/A UNIQUE BARBER SHOP, AND FREDDIE ORTIZ, INDIVIDUALLY, DEFENDANTS.
The opinion of the court was delivered by: Frank Maas, United States Magistrate Judge
REPORT AND RECOMMENDATION
TO THE HONORABLE WILLIAM H. PAULEY III
In this action, plaintiff Top Rank, Inc. ("Top Rank") alleges that defendant Freddie Ortiz ("Ortiz"), individually and doing business as the Unique Barber Shop, illegally intercepted cable television programming signals, in violation of the Cable Communications Policy Act ("Communications Act"), 47 U.S.C. § 553(a)(1) and 605(a), and the Copyright Act of 1976 ("Copyright Act"), 17 U.S.C. § 111(b). Following Ortiz's failure to answer or otherwise respond to the complaint, Your Honor entered an Order of Default and referred the matter to me to conduct an inquest regarding the damages, if any, to be awarded to Top Rank. (Docket Nos. 11-12).
By order dated April 3, 2002, I directed Top Rank to serve and file an inquest memorandum by May 2, 2002, setting forth its proof of damages, as well as proposed findings of fact and conclusions of law. (Docket N o. 13). Ortiz w as given until May 16, 2002, to file opposition papers. (Id.). By letter dated February 12, 2002, Top Rank informed the Court that instead of filing an inquest memorandum, it planned to rely on documents previously submitted to the Court. (Letter to the Court from Christopher J. Fitzpatrick, Esq., dated February 12, 2002 ("Fitzpatrick Letter")). Thereafter, however, Ortiz failed to file any opposition papers or contact this Court.
For the reasons set forth below, I recommend that Top Rank be awarded judgment in the amount of $5,591.35, consisting of statutory damages in the amount of $3,500.00, attorney's fees in the amount of $1,881.35, and costs in the amount of $210.00.
II. Standard of Review
In light of Ortiz's default, Top Rank's well-pleaded allegations concerning issues other than damages must be accepted as true. See Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); Time Warner Cable of New York City v. Barnes, 13 F. Supp.2d 543, 547 (S.D.N.Y. 1998); Cablevision Sys. New York City Corp. v. Lokshin, 980 F. Supp. 107, 111 (E.D.N.Y. 1997).
Additionally, although a plaintiff seeking to recover damages against a defaulting defendant must prove its claim through the submission of evidence, the Court need not hold a hearing as long as it has (i) determined the proper rule for calculating damages on the claim, see Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999), and (ii) the plaintiff's evidence establishes, with reasonable certainty, the basis for the damages specified in the default judgment. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997); Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989); see also Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 53-54 (2d Cir. 1993) (inquest on damages without hearing improper where based upon "single affidavit only partially based upon real numbers").
On the basis of the complaint and Top Rank's inquest papers, I find that the facts are as follows:
Top Rank is a corporation organized and existing under
the laws of Nevada, with its principal place of
business in Las Vegas, Nevada. (Compl. ¶ 4).
Defendant Ortiz is the owner and/or manager of the
Unique Barber Shop, a commercial establishment located
at 342 East 144th Street in the Bronx. (Id. ¶¶
Top Rank owns the copyrights and other exclusive rights to promote, produce, distribute, and license private, commercial-free television programming. (Id. ¶ 7). This programming is licensed on a pay-per-view and closed-circuit basis by Top Rank's authorized distributors. (Id. ¶ 9). The distributors pay Top Rank a fee for each residential or commercial customer who subscribes to its programming. (Id. ¶ 8). Top Rank uses an electronic device to scramble or encrypt its satellite transmissions of the programs and authorizes those entitled to receive the programming to unscramble and view the encrypted signal. (Id. ¶ 10).
On September 18, 1998, Ortiz, without authorization, intercepted and received the transmission of a Top Rank pay-per-view telecast featuring a boxing match between Oscar De La Hoya and Julio Cesar Chavez. (Id. ¶ 1; Pl.'s Mem. of L. at 3). Approximately fifteen people were inside the Unique Barber Shop watching this program on a single television. (See Affidavit of John E. Prindle, sworn to on Sept. 25, 1998 ("Prindle Aff.")).
A. Damages Under The Communications Act
Sections 553*fn1 and 605*fn2 of Title 47 of the United States Code prohibit the unauthorized interception and reception of cable programming services. Barnes, 13 F. Supp.2d at 547-48 (citing Int'l Cablevision, Inc. v. Sykes, 75 F.3d 123, 133 (2d Cir. 1996)); Lokshin, 980 F. Supp. at 112 ("In contrast to section 553, which by its statutory language applies only to transmissions via cable systems, section 605(a) applies to `the interception of cable-borne, as well as over-the-air, pay television' where cable-borne transmissions originate as satellite transmissions. Thus, when pay television programming is transmitted over both cable and satellite mediums, both statutes apply. . . ." (quoting Sykes, 75 F.3d at 130)).
Section 605 provides that a court may award an aggrieved party statutory damages 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)(II). Section 553 similarly provides for a statutory damage award of "not less than $250 or more than $10,000." Id. § 533(c)(3)(A)(ii). If a court finds that these statutes were violated "willfully and for the purpose of commercial advantage or private financial gain," it may, in its discretion, award an additional sum, up to $100,000 under Section 605 and $50,000 under Section 553. Id. §§ 605(e)(3)(C)(ii) & 553(c)(3)(B). Not surprisingly, Top Rank seeks to recover the maximum amount of damages allowable, $110,000 under Section 605 and $60,000 under Section 553, for a total of $170,000. (Fitzpatrick Letter at 2).
When a court determines that a defendant's conduct has violated both Sections 553 and 605 of the Communications Act, a plaintiff may recover damages under one of those sections only. Sykes, 75 F.3d at 127; Barnes, 13 F. Supp. at 548; Am. Cablevision of Queens v. McGinn, 817 F. Supp. 317, 320 (E.D.N.Y. 1993).
In this case, Top Rank seeks dam ages under both Sections 553 and 605. In its papers, how ever, Top Rank has not show n that any cable transmission w as involved in the theft of its signal by Ortiz. Accordingly, I have only considered Top Rank's damages under Section 605.
"The amount of damages to be awarded pursuant to Section 605 rests with the sound discretion of the court." Entertainment by J& J, Inc. v. Mama Zee Restaurant & Catering Services, Inc., 2002 WL 2022522, at *3 (E.D.N.Y. May 21, 2002). Because the statute provides little guidance on how damages should be assessed, some courts have calculated statutory damages based on the number of patrons in the establishment at the time of the violation. See, e.g., Entertainment by J&J, Inc. v. Nina's Restaurant and Catering, 2002 W L 1000286, at *3 (S.D.N.Y. May 9, 2002) (awarding $20 per patron); Time Warner Cable of New York City v. Googies Luncheonette, Inc., 77 F. Supp.2d 485, 490 (S.D.N. Y. 1999) (awarding $50 per patron); Time Warner Cable of New York City v. Taco Rapido Restaurant, 988 F. Supp. 107, 111 (E.D.N.Y. 1997) (awarding $50 per patron). Other courts have simply imposed damages in a flat amount. See, e.g., Entertainment by J&J, Inc. v. Suriel, 2003 WL 1090268, at *1 (S.D.N.Y. March 11, 2003) (awarding $11,000); King Vision Pay-Per-View Corp., Ltd. v. Papacito Lidia Luncheonette, Inc., 2001 WL 1558269, at *2 (S.D.N. Y. Dec. 6, 2001) (awarding $20,000); Kingvision Pay-Per-View, Ltd. v. Jasper Grocery, 152 F. Supp.2d 438, 442 (S.D.N.Y. 2001) (awarding $15,000 in total damages).
Here, Top Rank alleges that the capacity of the Unique Barber Shop is twenty-five people, and that Top Rank would have requested from Ortiz a sublicense fee of approximately $500 in order to authorize him to broadcast the event. (Pl.'s Mem. of L. at 9). Accordingly, Top Rank would have charged Ortiz $20 per potential patron. Because fifteen people were at the Unique Barber Shop on the night of the alleged violation, (see Prindle Aff.), if its license fee were based on actual attendance, Top Rank would be awarded only $300. However, as noted above, the statutory minimum prescribed by Section 605 is $1,000. Accordingly, because this amount is significantly greater than Top Rank's actual or potential damages, I recommend that Top Rank recover $1,000 in statutory damages.
Furthermore, because Ortiz's violation appears to have been willful, I recommend that the award be doubled to $2,000 pursuant to section 605(e)(3)(C)(ii). See Nina's Restaurant and Catering, 2002 WL 1000286, at *3 (doubling statutory award where violation was willful).
B. Damages Under The Copyright Act
Section 111(b) of the Copyright Act prohibits "the secondary transmission to the public of a performance or display of a work embodied in a primary transmission." 17 U.S.C. § 111(b). When such an infringement occurs, a court may award an aggrieved party statutory damages of "not less than $750 or more than $30,000, as the court considers just." 17 U.S.C. § 504(c)(1). Furthermore, if the "infringement was committed willfully," the court has discretion to increase the award of statutory damages to $150,000. Id. § 504(c)(2). Top Rank seeks to recover $100,000, which was the maximum amount of statutory damages available at the time the complaint was filed. (Fitzpatrick Letter at 2). Based on the same analysis employed to determine the damages under Section 605, I recommend that Top Rank be awarded $1500, which is twice the statutory minimum of $750 for Ortiz's copyright violation.
C. Attorney's Fees
Top Rank also alleges that it incurred attorney's fees and costs in the amount of $2,187.50, in the course of prosecuting this action. (See Aff. of Christoper F. Fitzpatrick, Esq., sworn to on Dec. 11, 2001 ("Fitzpatrick Aff."), ¶ 4). Section 605 authorizes a court to "direct the recovery of full costs, including the award of reasonable attorneys' fees to an aggrieved party who prevails." 47 U.S.C. § 605(e)(3)(B)(iii). When fixing a reasonable rate for attorneys' fees, courts may consider and apply prevailing market rates "for similar services by lawyers of reasonably comparable skill, experience, and reputation." Gierlinger v. Gleason, 160 F.3d 858, 882 (2d Cir. 1998) (quoting Blum v. Stenson, 465 U.S. 886, 896 n. 11, 104 S.Ct. 1541, 1547 n. 11, 79 L.Ed.2d 891 (1984)). The court may also rely on its ow n knowledge of private firm hourly rates. Miele v. New York State Teamsters Conf. Pension & Ret. Fund, 831 F.2d 407, 409 (2d Cir. 1987).
In the Second Circuit, a party seeking an award of attorneys' fees must support that request with contemporaneous time records that show, "for each attorney, the date, the hours expended, and the nature of the work done." New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1154 (2d Cir. 1983). Fee applications that do not contain such supporting data "should normally be disallowed." Id. at 1154. See also Kingvision Pay-Per-View v. The Body Shop, 2002 WL 393091, at *5 (S.D.N.Y. Mar. 13, 2002) (denying award of attorneys' fees when information regarding how the fees were accumulated was not provided even though requested amount was reasonable).
In prosecuting this action, Top Rank engaged the services of Jacobi, Sieghardt, Bousanti, Barone & Piazza, P.C. On its behalf, attorney Christopher J. Fitzpatrick has submitted an affidavit to the Court setting forth: (a) his professional experience; (b) the number of hours he devoted to this action and the nature of the work performed; and (c) the billing rate at which he was compensated. (See Fitzpatrick Aff. ¶¶ 3-4). Based upon my review, the hourly rates for legal services incurred by Top Rank seem reasonable. The attorney who handled this matter, however, also billed at his customary hourly rate for services more appropriately handled by a paralegal. I have therefore reduced his $250 hourly rate to $75 for the 1.75 hours that he spent traveling to court to file papers and ensuring that service was effected. As a result of that adjustment, I recommend that Top Rank be awarded attorney's fees in the amount of $1,881.25.
Top Rank also seeks to recover $210 in costs, consisting of a $60 fee for service of process and filing fees in the amount of $150. (Id. ¶ 4). This request should be granted.
For the reasons set forth above, I recommend that Top Rank be awarded damages, including attorney's fees and costs, totaling $5,591.35.
VI. Notice of Procedure for Filing of Objections to this Report
The parties are hereby directed that if they have any objections to this Report and Recommendation, they must, within ten (10) days from today, make them in writing, file them with the Clerk of the Court, and send copies to the chambers of the Honorable William H. Pauley III, United States District Judge, at the United States Courthouse, 500 Pearl Street, New York, N.Y. 10007, to the chambers of the undersigned, at the United States Courthouse, 500 Pearl Street, New York, N.Y. 10007, and to any opposing parties. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(e), 72(b). Any requests for an extension of time for filing objections must be directed to Judge Pauley. Any failure to file timely objections w ill result in a waiver of those objections for purposes of appeal. See Thom as v. Arn, 474 U.S. 140
, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985); 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(e), 72(b).