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ENTERTAINMENT BY J&J INC. v. FRIENDS II

April 25, 2003

ENTERTAINMENT BY J&J, INC., PLAINTIFF, AGAINST FRIENDS II, INC., D/B/A FRIENDS II, AND ROBIN O'FARRILL AND MINE RIVERA, DEFENDANTS.


The opinion of the court was delivered by: Ronald L. Ellis, United States Magistrate Judge

REPORT AND RECOMMENDATION
I. INTRODUCTION

This matter was referred for an inquest on damages on October 16, 2002, following an entry of final judgment by default as to defendant Friends II, Inc. d/b/a Friends II ("Friends"), by The Honorable John B. Sprizzo on June 28, 2002.*fn1 Based on the following facts presented to the Court by way of declaration and memorandum of law by the plaintiff Entertainment by J&J, Inc. ("Entertainment"), the Court recommends that Entertainment be awarded $6,000 in statutory damages, plus $2,193.75 in attorney's fees and $237 in costs, for a total of $8,430.75.

II. BACKGROUND

On January 25, 2002, Entertainment filed suit alleging violations of 47 U.S.C. § 553 and 605 by way of Friends' willfull interception and misappropriation of a closed circuit airing of the April 29, 2000 boxing match between Lennox Lewis and Martin Grant. See Memorandum of Law in Support of Plaintiff's Request of a Judgment by Default ("Pl. Mem.") at 3. Friends was served with the complaint on or about February 5, 2002, but failed to file an answer. Id. On March 29, 2002, Entertainment filed a motion for a default judgment against Friends, which the Court granted on June 27, 2002. Accordingly, the allegations of the amended complaint are now accepted as true. See Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). Entertainment held the rights to show the closed-circuit telecast of the April 29, 2000 championship boxing match ("the Event") between Lennox Lewis and Michael Grant at closed-circuit locations throughout New York. See Affidavit of Skip M. Klauber, plaintiff's attorney, in Support of Plaintiff's Motion for Default Judgment ("Klauber Aff.") at ¶¶ 3-4. Commercial establishments, such as bars, lounges, and restaurants could air the Event only if they were contractually authorized by Entertainment to do so. Id. at ¶ 5. Commercial establishments were required to pay Entertainment a sublicense fee, and to charge its patrons an admission fee for viewing the Event. Id. at ¶ 7.

In order to prevent the unauthorized interception and broadcast of the telecast, Entertainment's satellite transmission was electronically coded or scrambled. Id. at ¶ 6. Entertainment provided only contractually authorized commercial establishments with the decoding equipment and satellite coordinates necessary to receive the signal and broadcast the Event. See id. Friends did not contract with Entertainment to receive and broadcast the Event. See id. at ¶¶ 8-9. On the day of the broadcast, Entertainment's investigator observed approximately thirty-five patrons at Friends while the Event was being unlawfully broadcast. See Affidavit of Andre Arce investigator for plaintiff, in Support of Plaintiff's Motion for Default Judgment ("Arce Aff.").

III. DISCUSSION

A. Statutory Framework

47 U.S.C. § 553(a)(1) provides:

No person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be specifically authorized by law.
Subsection (b) prescribes criminal penalties for willful violations, and subsection (c) creates a civil cause of action for "[a]ny person aggrieved by any violation of subsection (a)(1) of this section." Civil remedies include injunctive relief, damages, costs, and attorney's fees. 47 U.S.C. § 553(c)(2). As to damages, the party aggrieved may prove "actual damages" as specified in subsection (c)(3)(A)(I), or may elect to recover "statutory damages for all violations involved in the action, in a sum of not less than $250 or more than $10,000 as the court considers just." Under either method of computation, the Court may increase the awarded amount by up to $50,000 if the plaintiff proves willfulness or self-gain by the defendant, or decrease the amount if defendant proves "he was not aware and had no reason to believe that his acts constituted a violation." 47 U.S.C. § 605(c)(3)(B)and (C).

47 U.S.C. § 605(a) provides, in relevant part:

No person not being authorized by the sender shall intercept any radio communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted communication to any person. No person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by radio and use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto.
Subsections (e)(1) and (2) impose criminal penalties, such as fines and imprisonment, for willful violations, and subsection (e)(3) creates a civil right of action for any aggrieved party. 47 U.S.C. § 605 (e)(3)(A). Prescribed civil remedies include injunctive relief, attorney's and costs. 47 U.S.C. § 605(e)(3)(B)(i) and (iii). Persons aggrieved may also receive either actual damages, § 605(e)(3)(C)(i)(I), or "statutory damages for each violation of (a) of this section involved in the action in a sum 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). In provisions that correspond to § 553(c)(3)(B)and(C), the court may increase the award for damages by up to $100,000, if the plaintiff proves willfulness or intentional self-gain, or decrease the award amount if the defendant proves innocence. 47 U.S.C. § 605(E)(3)(c)(ii) and (iii).

B. Friends' Liability

Telecast of the Event was transmitted by satellite communication. See Klauber Aff. at ¶ 6. Therefore, both 47 U.S.C. § 553, concerning cable system communications, and § 605, concerning radio communications, protect Entertainment's rights to the satellite signal. Thus, Friends violated both statutory sections when it illegally intercepted the satellite signal and displayed the Event without Entertainment's authorization. See Int'l Cablevision, Inc. v. Sykes, 75 F.3d 123, 133 (2d Cir. 1996) ("Sykes II"); Time Warner Cable v. U.S. Cable T.V., Inc., 920 F. Supp. 321, 328-29 (E.D.N.Y. 1996). Entertainment is a "person aggrieved" within the meaning of 47 U.S.C. § 553(c)(1) and 605(e)(3)(A).

When a court determines that a defendant's conduct has violated both § 605 and § 553 of the Communications Act, a plaintiff may recover damages under only one of those sections. Time Warner Cable v. Barnes, 13 F. Supp.2d 543, 548 (S.D.N.Y. 1998); New Contenders, Inc. v. Diaz Seafood Corp., 1997 WL 538827, at *1 (S.D.N.Y. 1997); American Cablevision of Queens v. McGinn, 817 F. Supp. 317, 320 (E.D.N.Y. 1993). An aggrieved cable operator is entitled to elect to recover damages under § 605 in consideration of ...


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