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CABLEVISION SYSTEMS NEW YORK CITY CORPORATION v. TORRES

United States District Court, Southern District of New York


September 9, 2003

CABLEVISION SYSTEMS NEW YORK CITY CORPORATION, PLAINTIFF, AGAINST JOSE TORRES, DEFENDANT

The opinion of the court was delivered by: Andrew Peck, Magistrate Judge

OPINION AND ORDER

Plaintiff Cablevision Systems New York City Corporation ("Cablevision") brings this action under the Federal Communications Act of 1934, 47 U.S.C. § 553(a)(1) and 605(a), against pro se defendant Jose Torres for purchasing, distributing, and using pirate cable television descramblers. (Compl. ¶¶ 1, 18-21.) Cablevision has moved for default judgment, injunctive relief, statutory damages, attorney's fees, and costs. (Dkt. No. 21.) For the reasons set forth below, judgment is entered for Cablevision against Torres on default for statutory damages of $171,000, attorney's fees of $5,717.00, and disbursements of $630.15, for a total of $177,347.15, and the Court also orders permanent injunctive relief. [ Page 2]

FACTS

The Complaint

The complaint alleges that Torres violated the Federal Communications Act of 1934, 47 U.S.C. § 553(a)(1) and 47 U.S.C. § 605(a), by the purchase, sale, and distribution of pirate cable television descramblers*fn1 from Whitestar/Intek Electronics "with the specific intent and knowledge that such devices would be used to descramble, decode, and thereby provide reception of the scrambled premium and pay per view programming services of Cablevision to persons who were neither paying for those services nor authorized by plaintiff to receive such programming." (Dkt. No. 1: Compl. ¶ 18.) Cablevision's Motion for Default and Injunctive Relief specifically alleges that Torres purchased eighteen cable descramblers, resold seventeen descramblers, and kept one for personal use. (Dkt. No. 21: Cablevision Br. at 9; Dkt. No. 21: Kempton Aff. ¶ 21.)

Procedural Background

Cablevision filed its complaint on September 20, 2002, and served Torres on October 16, 2002. (Dkt. No. 5: 10/16/02 Aff. of Service.) After Torres failed to respond to the complaint, Cablevision moved for default judgment, which Judge Stein granted on or about December 30, 2002. (Dkt. No. 21: Cablevision Br. at 2; see also Dkt. No. 6: Cablevision 12/6/02 Default Motion & annexed Clerk's Certificate of Default & 12/30/02 Default Judgment signed by Judge Stein.) [ Page 3]

In a letter to Judge Stein dated February 8, 2003, Torres explained that he had been in Puerto Rico from November 15, 2002 through January 31, 2003. (Dkt. No. 11: 2/8/03 Letter at 1; see also Dkt. No. 21: Sullivan Aff. ¶ 4.)

In a letter to the Court dated February 20, 2003, Cablevision acknowledged Torres' February 8, 2003 letter to Judge Stein and withdrew its request for a default judgment. (Dkt. No. 9: 2/24/03 Memo Endorsed Order.) Judge Stein ordered Torres to respond to the complaint by March 21, 2003 and scheduled a pretrial conference for that date. (Id.) At Cablevision's request, Judge Stein also withdrew Cablevision's motion for default judgment. (Dkt. No. 10:2/24/03 Order.)

On March 21, 2003, Judge Stein held a pretrial conference, which both Cablevision's counsel and defendant Torres attended. (Dkt. No. 13: 3/24/03 Order.) Judge Stein scheduled a May 9, 2003 status conference and set the discovery deadline for June 20, 2003. (Id.) According to Cablevision's letter to the Court dated May 5, 2003, Torres did not respond to Cablevision's discovery requests and Torres did not appear for his scheduled deposition on May 2, 2003. (Dkt. No. 14: 5/5/03 Letter.) Judge Stein ordered Torres to respond to Cablevision's discovery requests by May 23, 2003, to appear for deposition at Cablevision's counsel's office on May 29, 2003, and adjourned the status conference to May 21, 2003. (Dkt. No. 14: 5/6/03 Order.) At a conference attended by Cablevision's counsel and defendant Torres on May 21, 2003, Judge Stein granted Torres a further extension to respond to Cablevision's discovery requests by June 20, 2003, and ordered that he appear for his deposition at Cablevision's counsel's office on July 11, 2003 at 10:00 a.m., and reset the discovery deadline for July 24, 2003. (Dkt. No. 17: 5/23/03 Order.) At that conference, the [ Page 4]

parties also consented to proceed before a Magistrate Judge for all purposes pursuant to 28 U.S.C. § 636(c). (Dkt. No. 16: § 636(c) Consent & Order.)

On May 28, 2003, I mailed an order scheduling a status conference for July 14, 2003 at 5:30 p.m. and a copy of my individual rules to Torres by regular and certified mail. (DktNo. 18: 5/28/03 Order.) The certified copy was returned unclaimed, but the regular mail copy was not returned.

Torres still (1) has failed to file an answer to Cablevision's complaint; (2) did not attended his court-ordered deposition on July 11, 2003, nor contact Cablevision's counsel's office to explain his non-appearance; (3) failed to respond to discovery; and (4) failed to appear at the July 14, 2003 status conference before this Court, of which he had received notice. (Dkt. No. 21: Sullivan Aff. ¶ 6; Dkt. No. 21, Ex. F: 7/14/03 Hearing Transcript ["H."] 1-2.)

On or about July 31, 2003, Cablevision's counsel served Torres by first class mail, certified mail, and Federal Express with (1) the July 11, 2003 deposition transcript, recording Torres' non-appearance and (2) the transcript of the July 14, 2003 status conference before this Court that Torres failed to attend. (Dkt. No. 22: Sullivan 7/31/03 Aff. ¶ 2.) Also, on or about July 30, 2003, Cablevision served its renewed motion for a default judgment and supporting inquest papers on Torres by first class mail and Federal Express. (Dkt. No. 21: Aff. of Service.)

Torres' opposition to Cablevision's motion for default, damages, attorney's fees, and injunctive relief was due on August 14, 2003. (H. 5-6; Dkt. No. 21: Notice of Motion at 2.) Almost a month after that deadline, this Court has not received any submissions from Torres. [ Page 5]

ANALYSIS

Entry of a Default Judgment is Appropriate

"In deciding a motion for default judgment, the Court considers the following three factors: 1) whether the defendant's default was willful; 2) whether defendant has a meritorious defense to plaintiff's claims; and 3) the level of prejudice the non-defaulting party would suffer as a result of the denial of the motion for default judgment." Schostak v. Wright. 02 Civ. 8899, 2003 WL 1960581 at *3 (S.D.N.Y. Apr. 25, 2003); accord. e.g., Fashion Fragrance & Cosmetics v. Croddick. 02 Civ. 6294, 2003 WL 1824638 at *2 (S.D.N.Y. Apr. 8, 2003); Cablevision Svs. New York City Corp. v. Scott. 01 Civ. 7068, 2003 WL 841071 at *2 (S.D.N.Y. Mar. 6, 2003); Cablevision Svs. New York City Corp. v. Leath. 01 Civ. 9515, 2002 WL 1751343 at *2 (S.D.N.Y. July 26, 2002).*fn2 "Dispositions of motions for default judgment are left to the sound discretion of [ Page 6]

the district court." Schostak v. Wright. 2003 WL 1960581 at *3 (citing Shah v. New York State Dep't of Civil Service. 168 F.3d 610, 615 (2d Cir. 1999)); accord. e.g., Cablevision Svs. New York City Corp. v. Scott. 2003 WL 841071 at *2; Cablevision Svs. New York City Corp. v. Leath. 2002 WL 1751343 at *2.

Applying these factors, the Court finds that default judgment should be entered for Cablevision against Torres. E.g., Cablevision Sys. New York City Corp. v. Scott. 2003 WL 841071 at *2-3 (three factors met and default judgment appropriate: (1) default willful where defendant "failed to respond in any way to the Summons and Complaint or otherwise make any appearance" and "failed to provide any explanation for the failure to defend"; (2) no meritorious defense existed where defendant "failed to proffer any defense and is therefore deemed to have admitted the well-pleaded allegations of the Complaint"; and (3) denial of motion for default would be unfairly prejudicial to plaintiff where "no indication that requiring Plaintiff to take further steps prior to a determination on the merits would be effective in eliciting a response from the Defendant."); Cablevision Svs. New York City Corp. v. Leath. 2002 WL 1751343 at *2-3 (same). Here, as in Scott and Leath. defendant Torres failed to respond to the complaint, failed to respond to discovery or appear on the court ordered dates for his deposition, failed to appear for a Court conference (specifically set for after work hours to address his concerns), and failed to respond in any way to the motion for a default; accordingly, entry of a default judgment is appropriate.

On a Default, the Complaint's Factual Allegations (Except as to Damages) Are Taken As True

"Where, as here, `the court determines that defendant is in default, the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.'" [ Page 7]

Chen v. Jenna Lane. Inc., 30 F. Supp.2d 622, 623 (S.D.N.Y. 1998) (Carter, D.J. & Peck, M.J.) (quoting 10A C. Wright, A. Miller & M. Kane, Federal Practice & Procedure: Civil 3d § 2688 at 58-59 (3d ed. 1998)).*fn3

The complaint alleges that Torres purchased "pirate" cable television converter decoders from Whitestar/Intek Electronics; that he resold those devices to others to allow them to descramble Cablevision's premium and pay-per-view cable television programming; and that Torres himself used pirate devices to descramble Cablevision programming. (Dkt. No. 1: Compl. ¶¶ 18-21.) The complaint further alleges that unless restrained, Torres will continue to sell and use pirate converter devices. (Compl. ¶ 33.) [ Page 8]

Inquest Damages

The Second Circuit has approved the holding of an inquest by affidavit, without an in-person court hearing, "`as long as [the Court has] ensured that there was a basis for the damages specified in the default judgment.'" Transatlantic Marine Claims Agency. Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (quoting Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989)).*fn4

Pursuant to 47 U.S.C. § 605(e)(3)(C)(i)-(ii), the Court may award statutory damages of between $1,000 and $10,000, and where the violation is willful and for purposes of commercial advantage, additional damages of up to $100,000. For violation of 47 U.S.C. § 553, the Court may award statutory damages of $250 to $10,000, and may increase the amount to up to $50,000 for willful violations committed for purposes of commercial advantage. 47 U.S.C. § 553(c)(3)(A)(ii), (B). See generally. e.g., King Vision Pay-Per-View Corp. v. Drencia Rest. Corp., 01 Civ. 9777, 2002 WL 1000284 at *1-2 (S.D.N.Y. May 15, 2002) (Peck, M.J.); King Vision Pav-Per-View Corp. v. Papacito Lidia Luncheonette. Inc., 01 Civ. 7575, 2001 WL 1558269 at *2 (S.D.N.Y. Dec. 6, 2001) (Peck, M.J.); King Vision Pav-Per-View. Ltd, v. New Paradise Rest., 99 Civ. 10020, 2000 WL 378053 at *2 (S.D.N.Y. Apr. 11, 2000) (Peck, M.J.).

A plaintiff cannot recover under both 47 U.S.C. § 605 and § 553, as Cablevision acknowledges (Dkt. No. 21: Cablevision Br. at 10) and this Court has previously made clear. See. [ Page 9]

e.g., King Vision Pav-Per-View Corp. v. Drencia Rest. Corp., 2002 WL 1000284 at *2; King Vision Pay-Per-View Corp. v. Papacito Lidia Luncheonette. Inc., 2001 WL 1558269 at *2; King Vision Pav-Per-View. Ltd, v. New Paradise Rest., 2000 WL 378053 at *2.*fn5 Accordingly, Cablevision has elected to recover statutory damages under § 605.*fn6 (Dkt. No. 21: Cablevision Br. at 10.)

For each pirate descrambler Torres sold, 47 U.S.C. § 605(e)(3)(C)(i)(n) provides that Cablevision may recover "a sum not less than $10,000, or more than $100,000, as the court considers [ Page 10]

just." (See also Cablevision Br. at 10-11.) For each descrambler Torres personally used, § 605(e)(3)(C)(i)(II), Cablevision can recover a minimum of $1,000 and a maximum of $10,000. (See also Cablevision Br. at 11.)

Based on invoices obtained in judicial proceedings against Torres' supplier, Whitestar, Cablevision determined that Torres "purchased or had repaired or modified a total of 18 pirate decoders from [Whitestar/] Intek . . . all of which would be able to descramble cable services in some part of Cablevision's Bronx, New York cable system." (Dkt. No. 21: Cablevision Br. at 5; Dkt. No. 21, Ex. 6: Whitestar/Intek invoices to Torres; Dkt. No. 2: Kempton Aff. ¶¶ 18-19, 21.)

Cablevision seeks "(1) a minimum of $10,000.00 in statutory damages . . . for each of defendant's 17 sales of `pirate' equipment, and (2) $10,000.00 . . . for one count of the use of such equipment." (Dkt. No. 21: Cablevision Br. at 11.) Cablevision provides no explanation for seeking the minimum damages for Torres' sale of descramblers but the maximum damages for the personal use of one descrambler. See. e.g., Cablevision of S. Conn., Ltd. P'ship v. Smith. 141 F. Supp.2d 277, 287 (D. Conn. 2001) (statutory damages of $195,000 on default where defendant purchased twenty descramblers, based on assumption that nineteen were resold and one was kept for defendant's personal use).

Accordingly, the Court awards Cablevision $10,000 for each sale or distribution of seventeen descramblers and $1,000 for Torres' assumed personal use of one descrambler, for a total of $171,000 in statutory damages under § 605(e)(3)(C)(i)(II).*fn7 [ Page 11]

Pursuant to 47 U.S.C. § 605 (e)(3)(B)(i)*fn8, the Court also grants Cablevision's request for injunctive relief (Dkt. No. 21: Cablevision Br. at 12), and permanently enjoins Torres from intercepting or assisting in the interception of cable television services. See. e.g., Cablevision Sys. New York City. Corp. v. Sencion. 2001 WL 1586685 at *3.

Attorneys' Fees and Disbursements

Section 605(e)(3)(B)(iii) provides for the full recovery of costs, including reasonable attorneys fees. See. e.g., Kingvision Pay-Per-View Ltd, v. Rodriguez. 02 Civ. 7972, 2003 WL 548891 at *3 (S.D.N.Y. Feb. 25, 2003); Cablevision Svs. New York City Corp. v. Leath. 01 Civ. 9515, 2002 WL 1751343 at *4 (S.D.N.Y. July 26, 2002); CSC Holdings Inc. v. Ruccolo. 01 Civ. 5162, 2001 WL 1658237 at *3 (S.D.N.Y. Dec. 21, 2001). Cablevision seeks recovery of $5,920.50 in attorneys' fees and $630.15 in costs, for a total of $6,559.65 (Cablevision Br. at 13.) [ Page 12]

Where a statute (or the parties' agreement) provides for the award of attorney's fees to the prevailing party, traditionally "[f]ee awards in the Second Circuit are computed under the lodestar method, which multiplies hours reasonably spent by counsel times a reasonable hourly rate." General Elec. Co. v. Compagnie Euralair. S.A., 96 Civ. 0884, 1997 WL 397627 at *4 (S.D.N.Y. July 3, 1997) (Scheindlin, D.J. & Peck, M.J.); accord. e.g., City of Burlington v. Dague. 505 U.S. 557, 562, 112 S.Ct. 2638, 2641 (1992) ("The `lodestar' figure has, as its name suggests, become the guiding light of our fee-shifting jurisprudence. We have established a `strong presumption' that the lodestar represents the `reasonable' fee, . . . and have placed upon the fee applicant who seeks more than that the burden of showing that `such an adjustment is necessary to the determination of a reasonable fee.'"); LeBlanc-Sternberg v. Fletcher. 143 F.3d 748, 764 (2nd Cir. 1998) (there is a "strong presumption that the lodestar figure . . . represents a `reasonable' fee") (citation omitted); Luciano v. Olsten Corp., 109 F.3d 111, 116 (2d Cir. 1997) (affirming lodestar based fee award in Title VII action); City of Detroit v. Grinnell Corp., 495 F.2d 448, 470 (2d Cir. 1974); Schruefer v. Winthorpe Grant. Inc., 99 Civ. 9365, 2003 WL 21511157 at *3 (S.D.N.Y. July 2, 2003) (Peck, M.J.); N.S.N. Int'l Indus. N.V. v. E. I. DuPont de Nemours & Co., 89 Civ. 1692, 1996 WL 154182 at *2 (S.D.N.Y. Apr. 3, 1996) (Peck, M.J.).

As the fee applicant, plaintiff Cablevision (and its attorney, Mr. Sullivan) "bears the burden of documenting the hours reasonably spent by counsel, and the reasonableness of the hourly rates claimed." General Elec. Co. v. Compagnie Euralair. S.A., 1997 WL 397627 at *4.*fn9 [ Page 13]

Cablevision's counsel has asserted that he and four other attorneys together spent thirty-four hours on Torres' case and three paralegals together spent nine hours this case, amounting to $5,929.50. (Dkt. No. 21: Sullivan Aff. ¶¶ 9-19.) In support of the fee amounts, Cablevision has provided Mr. Sullivan's affidavit and a copy of contemporaneous time printouts. (Sullivan Aff. & Ex H.) Cablevision also requests disbursements in the amount of $630.15. (Sullivan Aff. ¶ 19 & Ex. H.)

Based on that affidavit and the Court's "`own knowledge of private firm hourly rates in the community,'" Schruefer v. Winthorpe Grant. Inc., 99 Civ. 9365, 2003 WL 21511157 at *3 (S.D.N.Y. July 2, 2003) (Peck, M.J.) (quoting Miele v. New York State Teamsters Conference Pension & Ret. Fund. 831 F.2d 407, 409 (2d Cir. 1987)); accord. e.g., Eastern Freight Ways v. Eastern Motor Freight. 02 Civ. 3138, 2003 WL 21540382 at *2 (S.D.N.Y. July 9, 2003) (Peck, M.J.), the Court finds Cablevision's counsels' and paralegals' hourly rates*fn10 and disbursements to be reasonable and appropriate. As for the time spent, however, the Court finds counsel's paralegal staff spent excessive time on calendar entries. In particular, a paralegal ("RAD," i.e., Renee A. Delano) twice billed simultaneous calendar entries as three distinct billing events and once billed two simultaneous calendar entries as two billing events. (See billing entries for March 27, May 6, and [ Page 14]

May 23, 2003.) The Court finds that the entry of three dates cannot reasonably take eighteen minutes and the entry of two dates cannot reasonably take twelve minutes. Indeed, all of paralegals Delano's and Weindler's billings are excessive and duplicative, or, in any event, so ministerial as not properly chargeable to the client. See. e.g., Schruefer v. Winthorpe Grant. Inc., 2003 WL 21511157 at *3 (10% reduction for imprecise and vague time entries such as "various phone conferences," "review file," "legal research," and "case administration"); N.S.N. Int'l Indus. N.V. v. E. I. DuPont de Nemours & Co., 1996 WL 154182 at *4 (15% reduction for attorney conferences and vagueness of billing entries); General Elec. Co. v. Compagnie Euralair. S.A., 1997 WL 397627 at *4-6 ("Based on all of these factors — inadequate proof of the reasonableness of the hourly rate charged, over-staffing, excessive `office conference' time, and excessive hours spent on certain tasks — the Court believes an across-the-board 50% reduction is appropriate.") (& cases cited therein). Cable vision's requested fees are therefore reduced by the $212.50 billed for paralegals Weindler and Delano. (See Dkt. No. 21: Sullivan Aff. ¶¶ 17-18.) The Court thus finds Cablevision is entitled to $5,717.00 in attorneys' fees and $630.15 in disbursements.

CONCLUSION

For the reasons stated above, the Court orders plaintiff Cablevision judgment against defendant Torres for $177, 347.15, as follows:

Statutory Damages $171,000.00 Attorney's Fees 5,717.00 Disbursements 630.15 Total $177,347.15 [ Page 15]

The Court also orders entry of a permanent injunction, as follows:

IT IS HEREBY ORDERED, ADJUDGED and DECREED that defendant Torres and any of his employees, agents, assigns, and any person(s) or entity(ies) in active concert and participation with any of them are hereby enjoined and restrained from aiding and abetting or engaging in the interception, divulgence, reception or display of the cable television programming, service or signal of plaintiff Cablevision, whether transmitted by air or by wire, without the express authorization of plaintiff Cablevision, and are hereby permanently enjoined and restrained from purchasing, obtaining, utilizing or installing any device or equipment capable of descrambling, intercepting, receiving, decoding or in any way making available the programming and services of plaintiff Cablevision without plaintiff Cablevision's authorization.

The Clerk of Court shall enter judgment in accordance with this Opinion.

SO ORDERED.


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