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DIRECTV, INC. v. HAMILTON

April 23, 2003

DIRECTV, INC., PLAINTIFF, AGAINST DENISE HAMILTON AND MAJMUD SALEJ, DEFENDANTS


The opinion of the court was delivered by: George A. Yanthis, United States Magistrate Judge.

REPORT AND RECOMMENDATION

Plaintiff DIRECTV, Inc. ("DIRECTV") brought this action alleging theft of satellite transmissions in violation of 17 U.S.C. § 1201(a)(1), 47 U.S.C. § 605(a) and 18 U.S.C. § 2510-2521. On September 23, 2002, the Honorable Allen C. Schwartz entered a default judgment against defendants Denise Hamilton and Majmud Salej. On September 24, 2002, Judge Schwartz referred this matter to the undersigned to report and recommend the amount of damages to be awarded plaintiff, plus reasonable attorneys' fees and costs. Plaintiff, in response to my direction, filed a timely written inquest submission. Defendant Salej failed to respond; defendant Hamilton responded by letter. For the reasons that follow, I respectfully recommend that Your Honor (1) award plaintiff damages against defendant Majmud Salej in the amount of $2,000.00, plus attorneys' fees and costs in the amount of $1,500.00 and (2) vacate the default judgment against defendant Denise Hamilton.

BACKGROUND

The facts pertinent to determination of this motion are set forth in the Complaint, in the Clerk's Certificate of Default and in the affidavits, affirmations and exhibits submitted by plaintiff.

DIRECTV provides satellite television programming to homes and businesses throughout the United States on a subscription and pay-per-view basis. Each customer is required to purchase a DIRECTV Access Card and other system hardware. In order to protect its satellite transmissions from theft and unauthorized reception, DIRECTV encrypts or "scrambles" the signals to all programming which a subscriber has not purchased.

DIRECTV alleges that defendants Salej and Hamilton purchased and used illegally modified DIRECTV Access Cards and other devices ("Pirate Access Devices") that are designed to permit viewing of DIRECTV's television programming without authorization by or payment to DIRECTV. Specifically, DIRECTV alleges that (1) on or about February 13, 2001, defendant Salej purchased two Pirate Access Devices from DSS-Stuff and (2) on or about March 8, 2001, defendant Hamilton purchased a Pirate Access Device from Vector Technologies. DIRECTV learned of these transactions upon inspection of Vector Technologies' and DSS-Stuff's business records which were seized pursuant to Writs of Seizure executed on May 25, 2001.

DISCUSSION

A. Majmud Salej

Defendant Majmud Salej has failed to appear or defend in this action and has been adjudged in default. Once a default judgment is entered, a defendant is deemed to have admitted all of the well-pleaded allegations in the complaint pertaining to liability. See Bambu Sales, Inc. v. Ozak Trading, Inc., 58 F.3d 849, 854 (2d Cir. 1995). However, "[w]hile a default judgment constitutes an admission of liability, the quantum of damages remains to be established by proof unless the amount is liquidated or susceptible of mathematical computation." Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974). In determining damages not susceptible to simple mathematical calculation, a court has the discretion to rely on detailed affidavits or documentary evidence in lieu of an evidentiary hearing. See Action S.A. v. Marc Rich & Co., Inc., 951 F.2d 504, 508 (2d Cir.), cert. denied, 503 U.S. 1006 (1992) (internal citation omitted); Fed.R.Civ.P. 55(b)(2). Moreover, the moving party is entitled to all reasonable inferences from the evidence it offers. See Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981) (internal citation omitted).

DIRECTV seeks to recover statutory damages under 47 U.S.C. § 605(e)(3)(C). For each violation of 47 U.S.C. § 605(a), a court may award the aggrieved party a statutory damage award 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)(11). DIRECTV seeks maximum statutory damages of $20,000.00, based upon defendant's purchase of two illegal devices. However, plaintiff has failed to proffer any justification for an award in excess of the statutory minimum. Accordingly, I conclude that plaintiff is entitled to damages against defendant Salej in the amount of $2,000.00, based upon the statutory minimum of $1,000.00 for each violation.

B. Denise Hamilton

On October 28, 2002, this Court received a letter from defendant Denise Hamilton (with supporting documentation attached) in which she contends that she was not living at home during the time frame in question and that she did not return to her residence until September 8, 2001. In response to Hamilton's letter, this Court held a telephone conference on January 28, 2003, at which time I informed the parties that I construed Hamilton's letter as a motion to vacate the default judgment and directed plaintiff to respond by February 11, 2002. Plaintiff timely filed opposition papers.

Pursuant to Fed.R.Civ.P. 55(c), a court may set aside a default judgment in accordance with Fed.R.Civ.P. 60(b), which states in relevant part:

On motion and upon such terms as are just, the Court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect, or any other reason justifying relief from the operation of the judgment."
In deciding whether to grant a motion to vacate a default judgment, the Court should consider "(1) whether the default was willful; (2) whether the defendant has a meritorious defense; and (3) the level of prejudice that may occur to the non-defaulting party if relief is granted." American Alliance Ins. Co., Ltd. v. Eagle Ins. Co., 92 F.3d 57, 59 (2d Cir. 1996) (quotation and citation omitted). "All doubts are to be resolved in favor of the party seeking relief from ...

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