Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

CABLEVISION SYSTEMS NEW YORK CITY CORP. v. EVANGELISTA

United States District Court, S.D. New York


May 5, 2004.

CABLEVISION SYSTEMS NEW YORK CITY CORPORATION, Plaintiff, -against- RAPHIAL EVANGELISTA, Defendant

The opinion of the court was delivered by: KEVIN FOX, Magistrate Judge

REPORT AND RECOMMENDATION

TO THE HONORABLE JOHN E. SPRIZZO, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

  In this action, Cablevision Systems New York City Corporation ("Cablevision") alleges that the defendant: (1) engaged in the sale and distribution of "pirate" converter-decoder devices ("pirate decoding devices"), in violation of 47 U.S.C. § 553(a)(1) and 605(e)(4); and (2) used one or more of these "pirate" decoding devices to intercept Cablevision's premium and pay-per-view programming services without Cablevision's authorization and without payment of the requisite fee to Cablevision, in violation of 47 U.S.C. § 553(a)(1) and 605(a).

  Upon defendant Raphial Evangelista's ("Evangelista") failure to file an answer or otherwise respond to the complaint, your Honor ordered that a default judgment be entered against him. 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 Evangelista.

  The Court directed Cablevision to serve and file 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. The Court also directed Evangelista to serve and file any opposing memoranda, affidavits and exhibits, as well as any alternative findings of fact and conclusions of law he deemed appropriate. The defendant did not file any papers in opposition to plaintiff's submissions.

  Plaintiff's submissions aver that it is entitled to $50,000 in statutory damages and $1,622.50 in costs and attorneys' fees. For the reasons that follow, I recommend that Cablevision be awarded $47,671.10: statutory damages pursuant to 47 U.S.C. § 605 in the amount of $46,048.60, attorneys' fees in the amount of $1,442.50, and costs in the amount of $180.

  II. BACKGROUND AND FACTS

  When a defendant defaults in an action, by failing to plead or otherwise defend against a complaint, the defendant is deemed to have admitted every well-pleaded allegation of the complaint 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). In addition, the plaintiff is entitled to all reasonable inferences from the evidence presented. See Au Bon Pain Corp. v. Artect, Inc., et al., 653 F.2d 61, 65 (2d Cir. 1981). Based upon the submissions made by the plaintiff, the complaint filed in the instant action, and the Court's review of the entire court file in this action, the following findings of fact are made:

  Cablevision is a corporation which is duly registered to do business in New York State and has its principal offices at 1111 Stewart Avenue, Bethpage, New York. See Plaintiff's Memorandum of Law in Support of Inquest ("Plaintiff's Mem."), at 2. Evangelista is an individual having a residence at 2274 Grand Concourse Boulevard, Apt. 1D, Bronx, New York. See Id. Pursuant to a franchise awarded by the political subdivisions of New York state, Cablevision constructs, operates and maintains cable television systems in parts of New York City, including Bronx County, where the defendant resides. See Affidavit of Chuck Carroll in Support of Inquest ("Carroll Aff."), ¶ 2, at 1.

  Cablevision offers cable television services to subscribers who request and pay for them. See Id. Cablevision provides various tiers of programming services. "Basic" service is a level of service to which an individual can subscribe at a monthly rate and receive enhanced quality reception of broadcast stations, as well as a small number of additional programming services. See Id., ¶ 3, at 1-2. "Family" service is a higher level of service to which a customer can subscribe at a monthly rate. With that level of service, he or she can receive all of Cablevision's programming services, including all of those offered in the Basic service package. However, premium and pay-per-view programming services are excepted. See Id. "Optimum" service is a level of service provided which includes all programming available under "Family" service plus certain premium stations. See Id.

  Cablevision's residential subscribers may also elect to subscribe to one or more premium services such as Cinemax, Home Box Office and Showtime, for an additional monthly charge per service, and may elect to order pay-per-view programming services. Pay-per-view programming includes movies and sporting events, a fee for which is charged on a per event basis. See Id., ¶¶ 4, 5, at 2.

  Premium services range in price from $1.95 to $14. 95 per month per service. See Id. ¶ 4, at 2. The full range of Cablevision's premium programming channels, not including pay-per-view events, is offered at an average cost to a residential subscriber of approximately $80.95 per month. See Id. The pay-per-view service includes selections which typically range in price between approximately $4.50 and $49.95 per selection, and are offered continuously over a 24 hour period. See Id., ¶ 5, at 2. The aggregate value of each individual pay-per-view event offered over a typical month, assuming each pay-per-view event is viewed only once, is hundreds of dollars. See Id.

  Cablevision provides its cable television service to subscribers via subscription agreements. Cablevision agrees to provide the programming services requested by a subscriber in return for the subscriber's agreement to pay for the same on a monthly basis. See Id., ¶ 6, at 2. Cablevision's subscribers pay a monthly fee for the specific level and amount of programming services they have selected and purchased from Cablevision. Each Cablevision subscriber is entitled to receive only the level and amount of cable programming and services which that subscriber has selected and paid for. See Id., ¶ 7, at 3.

  As part of its cable service, Cablevision provides each of its subscribers with a piece of equipment known as a converter-decoder. Cablevision programs that equipment so that each subscriber can receive and view only the level and amount of cable programming which he or she has selected, purchased, and is thereby authorized to receive. The rental fee for the converter-decoder provided by plaintiff to its subscribers is regulated by the Federal Communications Commission on an actual cost basis. The fee is included on the subscriber's monthly bill. See id., ¶ 8, at 3.

  Cablevision receives the signals to its cable television programming services, including all of its premium and pay-per-view programming, from orbiting satellites and local radio towers. See Id., ¶ 9, at 3. The theft of cable programming is commonly known as cable "piracy." In order to protect its cable programming from theft and unauthorized reception, Cablevision encrypts or "scrambles" the signals to all programming which a subscriber has not purchased and is not authorized to receive. When Cablevision's programming is in a scrambled mode, it is distorted and unviewable to a subscriber who has not paid for such programming. See Id. Scrambling is a principal security measure used by Cablevision and other cable television operators to protect their programming services against unauthorized reception.

  Either by technical modification or computer command, Cablevision authorizes the converter-decoders provided to its subscribers to descramble reception of only those programming channels which a subscriber has purchased. See Id., ¶ 10, at 3. The converter-decoders which Cablevision provides to its subscribers have a technology feature and function known as "addressability." Addressability is a communication link between a cable operator's central computer and the descrambling of computer circuitry in each converter-decoder provided to its subscribers. See Id., ¶ 11, at 4.

  There is a "black market" industry of various manufacturers, vendors, and distributors of "pirate" converter-decoders. These "pirate" converter-decoders are sold to cable subscribers who use these devices to avoid paying a cable operator's subscription fees for the authorized reception of premium and pay-per-view cable television programming. A cable operator's authorized converter-decoder can also be modified into a "pirate" converter-decoder by inserting unauthorized integrated circuits, commonly known as "chips," into that device or by electronically reprogramming the device. "Pirate" converter-decoders enable their users to receive all scrambled premium and pay-per-view cable television programming in a descrambled mode, regardless of whether such services have been paid for or whether the user is authorized to receive such programming. With a "pirate" converter-decoder, the addressability technology is disabled so that the cable operator is unable to communicate with the "pirate" converter-decoder or even recognize that it has been attached to its cable system. See Id., ¶ 14, at 4-5.

  Evangelista became a Cablevision subscriber on September 26, 1997, and subscribed to the Family level of service. See Id., ¶ 18, at 6. Defendant's residence was provided with an authorized converter-decoder on that date. On April 13, 1999, Evangelista downgraded his service to Cablevision's Broadcast Basic service with HBO, for which he pays $28.05 per month. See Id.

  On October 5, 1998, Evangelista purchased five (5) "pirate" converter-decoders from D Electronics,*fn1 permitting the viewing of Cablevision's premium and pay-per-view programming services without authorization. See Id., ¶ 19, at 6. There is no legitimate function or purpose on a cable system for decoders which have been designed to descramble all scrambled programming, including pay-per-view events. The sole purpose of such devices is to enable their users to receive unauthorized cable television programming without having to make payment to a cable operator for those services. The quantity of devices purchased by the defendant is inconsistent with personal use and entirely consistent with the conduct of a distributor. Therefore, the number of "pirate" decoder-converters purchased by defendant demonstrates his intent to distribute and/or sell such devices on the black market. The only conceivable motive the defendant could have had in selling this equipment was his direct or indirect commercial advantage or personal financial gain. See Id., ¶¶ 21, 22, at 6.

  III. CONCLUSIONS OF LAW

  47 U.S.C. § 553*fn2 and 605*fn3 each prohibits the unauthorized interception and reception of cable programming services which originate and are delivered via satellite or by other means of over-the-air signal transmission. See Time Warner Cable of New York City v. Barnes, 13 F. Supp.2d 543, 547-48 (S.D.N.Y. 1998) (citing International Cablevision, Inc. v. Sykes, 75 F.3d 123, 133 [2d Cir. 1996]); Cablevision Systems New York City Corp. v. Lokshin, 980 F. Supp. 107, 112 (E.D.N.Y. 1997).*fn4 In addition, 47 U.S.C. § 553*fn5 and 605*fn6 each prohibits the unauthorized reception of cable television programming services and the sale of "pirate" cable television devices. See Sykes, 75 F.3d at 133.

  Cablevision's premium and pay-per-view programming is sent to Cablevision from orbiting satellites. Carroll Aff., ¶ 9, at 3. Accordingly, Cablevision's cable programming services are protected from unauthorized reception under 47 U.S.C. § 605(a). See Barnes, 13 F. Supp.2d at 548 (citations omitted).

  Evangelista purchased five (5) "pirate" converter-decoders from D Electronics. These devices would permit one to view Cablevision's premium and pay-per-view programming services without authorization. See Carroll Aff., ¶¶ 20-21, at 6. The large number of devices purchased permits an inference to be drawn that defendant's intent was to distribute and/or sell the "pirate" devices on the black market. As the court explained in Cablevision Systems Corp. v. De Palma, No. 87 Civ. 3528, 1989 WL 8165, at *4 (E.D.N.Y. Jan. 17, 1989):

While [plaintiff] did not introduce direct evidence that the defendant sold or redistributed these boxes, the evidence taken as a whole in light of common experience compels the conclusion that such an activity is the only possible result. When a person buys or imports goods in such large quantities that the overabundance renders the extra goods useless to that person, the only natural conclusion to be drawn is that that person purchased those goods with the intent of selling or distributing them into the marketplace.
In any event, even if an alternative inference could be drawn, defendant's default has left the Court without any factual basis upon which to draw any such alternative inference respecting the use to which defendant put the large number of converter-decoders he purchased. See Time Warner Cable of New York City v. Browne, No. 00 Civ. 0412, 2000 WL 567015, at *1 (S.D.N.Y. May 10, 2000). In light of the above, the Court finds that defendant sold and/or distributed pirate devices to aid in the theft of Cablevision's programming services, in violation of 47 U.S.C. § 553(a)(1) and 605(e)(4).

  Cablevision possesses "proprietary rights" in the communications which Evangelista intercepted and, thus, 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 47 U.S.C. § 553 and 605, a plaintiff may recover damages under only one of those sections. See Barnes, 13 F. Supp.2d at 548; American Cablevision of Queens v. McGinn, 817 F. Supp. 317, 320 (E.D.N.Y. 1993). For violations of both sections 605 and 553, an aggrieved cable operator is entitled to elect to recover damages under section 605 in consideration of section 605's higher damages award. See Sykes, 75 F.3d at 127; Barnes, 13 F. Supp.2d at 548.

  Cablevision has elected to recover statutory damages against defendant instead of actual damages. For the sale of "pirate" decoding devices, 47 U.S.C. § 605(e)(3)(C)(i)(II) provides that, "for each violation of paragraph (4) of this subsection involved in the action an aggrieved party may recover statutory damages in a sum not less than $10,000, or more than $100,000, as the court considers just." For the use of a "pirate" decoding device to intercept illegally Plaintiff's services, statutory damages from $1,000 to $10,000 per violation may be recovered. See 47 U.S.C. § 605(e)(3)(C)(i)(II).

  Defendant purchased five (5) "pirate" decoding devices; one alone would provide its user with all of Cablevision's premium and pay-per-view programming services. Therefore, the Court finds that a rational inference may be drawn that defendant used one "pirate" decoding device at his residence to intercept Plaintiff's cable television programming services and sold the remaining four (4) devices. Accordingly, the Court finds that plaintiff is entitled to an award of $40,000, pursuant to 47 U.S.C. § 605, for defendant's sale of the four (4) "pirate" decoding devices. See Browne, 2000 WL 567015, at *1 (granting default judgment and awarding $10,000 for each pirate device allegedly distributed by defendant).

  Plaintiff also requests that it be awarded the maximum statutory damages, $10,000, for defendant's use of a "pirate" decoding device to intercept illegally Cablevision's cable television programming services. However, for the reasons that follow, the Court finds that an award of that amount would be inappropriate.

  Defendant purchased the five (5) "pirate" converter-decoder devices on October 5, 1998. Defendant became a Cablevision subscriber on September 26, 1997, subscribing to the Family level of service. Thereafter, on April 13, 1999, defendant downgraded to Cablevision's Broadcast Basic service with HBO, for which he pays $28.05 per month. Therefore, the Court finds that Plaintiff's unauthorized usage encompassed approximately 34 months (from the purchase of "pirate" converter decoder devices on October 5, 1998, until August 15, 2001, the date on which the instant complaint was filed). The record reflects that the full range of Cablevision's premium programming service, not including pay-per-view events, is offered at an average cost to a residential subscriber of approximately $80.95 per month. Therefore, it is reasonable to conclude that, beginning on October 5, 1998, the defendant was receiving unauthorized free access to programming valued at $52.90 per month. This unauthorized usage continued for 34 months, until August 15, 2001. Accordingly, $1,798.60 in unpaid premium programming fees were lost by Cablevision.

  The aggregate value of each pay-per-view event offered over a typical month, assuming each pay-per-view event is viewed only once, is hundreds of dollars per month. However, to conclude that Evangelista watched each and every pay-per-view selection offered, on each day for the 34-month period, is unreasonable.

  Cablevision's pay-per-view events range in costs from approximately $4.50 to $50. Based on these costs, the Court finds that an average value of $125 per month for defendant's unauthorized free access to Cablevision's pay-per-view events is appropriate. See, e.g., Lokshin, 980 F. Supp. at 113 (finding award of $125 per month for unauthorized pay-per-view services to be reasonable). Under the circumstances, $4,250 is the reasonable value of the pay-per-view selections plaintiff might have viewed without making the requisite payment to Cablevision. This sum takes into consideration Evangelista's 34 months of unauthorized usage. In reaching this determination, the Court has also considered Evangelista's failure to appear in this action; it illustrates his indifferent attitude toward the communications law. See Cablevision Systems New York City Corp. v. Faschitti, No. 94 Civ. 6830, 1996 WL 48689, at *2 (S.D.N.Y. Feb. 7, 1996) (citing Cable/Home Communication Corp. v. Network Prods., Inc., 902 F.2d 829, 852 [11th Cir. 1990] [recognizing goal of deterrence and noting that court may consider party's attitude in determining statutory damages award]).

  Accordingly, the Court finds that plaintiff is entitled to an award of $6,048.60, pursuant to 47 U.S.C. § 605, for defendant's use of a "pirate" decoding device to intercept illegally Plaintiff's cable television programming services.

  47 U.S.C. § 605 authorizes a court to "direct the recovery of full costs, including the award of reasonable attorney's fees to an aggrieved party who prevails." See 47 U.S.C. § 605(e)(3)(B)(iii).

  When fixing a reasonable rate for attorney fees, it is appropriate for a court to consider and to apply the prevailing market rates in the relevant community for similar legal work of lawyers of reasonably comparable skill, experience and reputation. See Blum v. Stenson, 465 U.S. 886, 895 n. 11, 104 S.Ct. 1541, 1547 n. 11 (1984). In addition, it is permissible for a court to rely upon its own knowledge of private firm hourly rates in deciding what reasonable attorney fees are in the community. Miele v. N.Y. State Teamsters Conf. Pens. & Retirement Fund, 831 F.2d 407, 409 (2d Cir. 1987).

  In the Second Circuit, a party seeking an award of attorney 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 Association for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1154 (2d Cir. 1983). Attorney fee applications that do not contain such supporting data "should normally be disallowed." Id. at 1154.

  In prosecuting this action against Evangelista, Cablevision engaged the service of the law firm Lefkowitz, Louis & Sullivan, L.L.P. Shaun K. Hogan, Esq. ("Hogan"), an attorney with that firm, submitted an affidavit to the Court setting forth: (a) the names of the attorneys who worked on this matter; (b) the professional experience of those persons; (c) the number of hours each attorney devoted to this action and the nature of the work each person performed; and (d) the hourly rate at which each was compensated. In addition, Hogan averred that certain work done by attorneys and paralegals of the law firm was performed at a set fee, pursuant to a fee schedule previously agreed upon by plaintiff and counsel.

  Contemporaneous time records for the relevant law firm personnel were also submitted to the Court. The time records indicate that plaintiff incurred attorney fees through the work performed by the following law firm personnel:

Shaun K. Hogan, Esq.: 0.40 hours @ $165 per hour William E. Primavera, Esq.: Draft summons and complaint @ $300 Alfonso N. Cava, Paralegal: 0.90 hours @ $85 per hour Draft default papers @ $200 Janine Zabbia, Paralegal: Draft papers re damages @ $800
  Based upon the nature of this case, the Court's review of the submissions by Cablevision, which outline the services performed by counsel, and the Court's understanding of the hourly rates charged by private law firms in the community, the Court finds that $1,442.50 in attorneys' fees were reasonably incurred by Cablevision in connection with prosecuting this action against Evangelista. Plaintiff seeks to recover $180 in costs: $150 incurred in filing fees and $30 incurred in serving the defendant with the summons and complaint. This request is reasonable and should be granted.

  IV. RECOMMENDATION

  For the reasons set forth above, the Court recommends an award to Cablevision of $47,671 10 for damages, costs and attorneys' fees incurred in prosecuting this action against Evangelista. * * *

  Plaintiff shall serve Evangelista with a copy of this Report and Recommendation and shall submit proof of service to the Court.

 

V. FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
  Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have ten (10) days from service of the Report to file written objections. See also Fed.R.Civ.P. 6. Such objections, and any responses to objections, shall be filed with the Clerk of Court, with courtesy copies delivered to the chambers of the Honorable John E. Sprizzo, United States District Judge, 40 Centre Street, Room 2201, New York, New York 10007, and to the chambers of the undersigned, 40 Centre Street, Room 540, New York, New York 10007. Any requests for an extension of time for filing objections must be directed to Judge Sprizzo. FAILURE TO FILE OBJECTIONS WITHIN TEN (10) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See Thomas v. Arn, 474 U.S. 140 (1985); IUE AFL-CIO Pension Fund v. Hermann, 9 F.3d 1049, 1054 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir. 1992); Wesolek v. Candair Ltd., 838 F.2d 55, 57-59 (2d Cir. 1998); McCarthy v. Manson, 714 F.2d 234, 237-38 (2d Cir. 1983).


Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.