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KINGVISION PAY-PER-VIEW v. MILAGROS APONTE

May 5, 2003

KINGVISION PAY-PER-VIEW, LTD., AS BROADCAST LICENSEE OF THE MARCH 3, 2000 TRINIDAD/REID PROGRAM, PLAINTIFF, AGAINST MILAGROS APONTE, ET AL., DEFENDANTS.


The opinion of the court was delivered by: Kevin Nathaniel Fox, United States Magistrate Judge

REPORT AND RECOMMENDATION

TO THE HONORABLE RICHARD M. BERMAN, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

In this action, plaintiff Kingvision Pay-Per-View, Ltd. ("Kingvision") alleges that defendants Milagros Aponte ("Aponte"), individually and d/b/a Amsterdam Cafe and Billiards ("Amsterdam Cafe"), Amsterdam Cafe, Danilo B. Vazquez Garcia ("Garcia"), individually, and d/b/a Buena Vista Billiards ("Buena Vista"), Buena Vista, Fusion Restaurant Inc. ("Fusion"), El Conde Rest. Corp. ("El Conde"), Julio Maguina ("Maguina"), individually, and as an officer, director, shareholder and/or principal of J & R Café Corp. ("J & R Café"), J & R Café, Griselda Reyes ("Reyes"), individually, and as an officer, director, shareholder and/or principal of Las Hermanas Rest. Inc. ("Las Hermanas"), Las Hermanas, Frances Ortiz ("Ortiz"), individually and d/b/a Los Marranos Luncheonette ("Los Marranos"), Los Marranos, Nacho's Social Club ("Nacho's"), Miguel Peralta ("Peralta"), individually, and d/b/a M P Tenares Restaurant ("M P Tenares"), and M P Tenares (collectively "defendants") engaged in the illegal interception of a transmission of a boxing match between Felix Trinidad and David Reid ("Trinidad/Reid Fight"), on March 3, 2000, and exhibited the event at the time of its transmission willfully and for the purposes of commercial advantage or private financial gain, in violation of the Cable Communications Policy Act ("Communications Act"), as amended, 47 U.S.C. § 553 and 605.

Upon the defendants' failure to file an answer or otherwise respond to the Complaint, your Honor ordered that a default judgment be entered against them.*fn1 Thereafter, your Honor referred the matter to the undersigned to conduct an inquest and to report and recommend the amount of damages, if any, to be awarded against the defendants. The Court directed Kingvision to serve and file its proposed findings of fact and conclusions of law, and an inquest memorandum setting forth its proof of damages, costs of this action and its attorneys' fees. Defendants were directed by the Court to serve and file any opposing memoranda, affidavits and exhibits, as well as any alternative findings of fact and conclusions of law they deemed appropriate.

Plaintiffs submissions aver that it is entitled to $110,000 from each defendant: $10,000 in statutory damages and $100,000 in enhanced damages. Plaintiff also seeks $1,500 in attorneys' fees for each location at which the Trinidad/Reid Fight was exhibited illegally, and $275 per defendant in costs. None of the defendants filed papers in opposition to plaintiffs submissions.

For the reasons set forth below, I recommend that Kingvision be awarded damages and costs against the defendants in the following amounts: Aponte in the amount of $6,275; Amsterdam Café in the amount of $6,275; Garcia in the amount of $6,275; Buena Vista in the amount of $6,275; Fusion in the amount of $6,275; El Conde in the amount of $6,275; Maguina in the amount of $6,275; J & R Café in the amount of $6,275; Reyes in the amount of $6,275; Las Hermanas in the amount of $6,275; Ortiz in the amount of $6,275; Los Marranos in the amount of $6,275; Nacho's in the amount of $6,275; Peralta in the amount of $6,275; and M P Tenares in the amount of $6,275.

II. BACKGROUND AND FACTS

Based on the submissions by plaintiff, the Complaint filed in the instant action — the allegations of which, perforce of the defendants' default, must be accepted as true, except those relating to damages, 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) — and this Court's review of the entire court file in this action, the following findings of facts are made:

Kingvision is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 501 Fairway Drive, Deerfield Beach, Florida 33441. First Amended Complaint, ¶ 5, at 9-10. Aponte is an individual. See id., ¶ 6, at 10. Amsterdam Café is a commercial establishment having its principal place of business at 1985 Amsterdam Avenue, New York, New York 10032. See id., ¶ 7, at 10. Garcia is an individual having a principal residence at 268 East 181St Street, Bronx, New York 10457. See id., ¶ 24, at 12. Buena Vista is a commercial establishment having its principal place of business at 2376 Amsterdam Avenue, New York, New York 10033. See id., ¶ 25, at 12. Fusion is a commercial establishment having its principal place of business at 936 Second Avenue, New York, New York 10022. See id., ¶ 28, at 13. El Conde is a commercial establishment having its principal place of business at 4139 Broadway, New York, New York 10033. See id., ¶ 48, at 16. Maguina is an individual having a principal residence at 9 Hurd Avenue, Garnerville, New York 10923, and an officer, director, shareholder and/or principal of J & R Café. See id., ¶ 77, at 20. J & R Café is a commercial establishment having its principal place of business at 147 Broadway, Haverstraw, New York 10927. See id., ¶ 78, at 20. Reyes is an individual, and an officer, director, shareholder and/or principal of Las Hermanas. See id., ¶ 87, at 21. Las Hermanas is a commercial establishment having its principal place of business at 1846 Jerome Avenue a/k/a 3 East 176th Avenue, Bronx, New York 10453. See id., ¶ 88, at 21. Ortiz is an individual. See id., ¶ 92, at 22. Los Marranos is a commercial establishment having its principal place of business at 1524 Watson Avenue, Bronx, New York 10472. See id., ¶ 93, at 22. Nacho's is a commercial establishment having its principal place of business at 39 Main Street, Haverstraw, New York 10927. See Id., ¶ 104, at 23. Peralta is an individual having a principal residence at 1690 East 174th Street, 2G, Bronx, New York 10472 See id., ¶ 124, at 26. M P Tenares is a commercial establishment having its principal place of business at 501 West 175th Street a/k/a 2316 Amsterdam Avenue, New York, New York 10033. See id., ¶ 125, at 26.

Kingvision, by contract, was granted the exclusive right to distribute, by way of closed circuit television and encrypted satellite signal, the March 3, 2000 transmission of the Trinidad/Reid Fight. See id., ¶ 159, at 31. Under the terms of the contract, plaintiff was entitled to enter into agreements with various business entities in New York State which allowed these entities to exhibit the event publicly to their patrons. See id., ¶ 160, at 31. The cost to Kingvision of obtaining the exclusive right to distribute the event to the relevant venues in New York was substantial. See id., ¶ 161, at 31.

The Complaint alleges that the defendants unlawfully intercepted the television signal of the event and exhibited it at their respective places of business, at the time of the transmission, knowingly, willfully and for the purposes of commercial advantage or private financial gain. See id., ¶ 162, at 31-32. The Complaint alleges further that defendants modified a device, such as a satellite receiver, or used equipment, such as a cable converter box, to intercept plaintiffs broadcast, knowing that such a modified device or piece of equipment was designed primarily to assist the unauthorized decryption of satellite cable programming or direct-to-home satellite services. See id., ¶ 163, 170 at 32-33.

According to plaintiff, after it began to experience an erosion of sales of pay-per-view broadcasts to commercial establishments throughout the United States, and especially in New York, it endeavored to discover the cause of the loss. To this end, plaintiff enlisted licensed private investigators. Plaintiff states that the cause of the erosion in its sales was determined to be the "piracy" of its broadcasts by unauthorized and unlicenced establishments. See Plaintiffs Inquest Memorandum, Exhibit B: Affidavit of Donna K. Westrich, Vice-President of Kingvision.

Plaintiff avers that programming of the type it offers cannot be "mistakenly or innocently intercepted," and identifies various methods by which a "signal pirate" may unlawfully intercept a television signal. See id. These include: (a) the use of a "blackbox," which is purchased for a fee, and, when installed on a cable television line, will allow for the descrambled reception of a pay-per-view broadcast; (b) the purposeful misrepresentation of a commercial establishment as a residential property, making possible the purchase of a pay-per-view broadcast at a reduced rate; (c) the use of an illegal "cable drop" or "splice" from a residence adjacent to a commercial establishment, allowing a television broadcast that was purchased at a residential rate to be ...


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