United States District Court, S.D. New York
June 29, 2004.
CABLEVISION SYSTEMS NEW YORK CITY CORPORATION, Plaintiff,
CATHERINE COLLINS, Defendant.
The opinion of the court was delivered by: FRANK MAAS, Magistrate Judge
REPORT AND RECOMMENDATION TO THE HONORABLE RICHARD OWEN[fn*]
[fn*] This Report and Recommendation was prepared with the
assistance of Heather Burke, a first-year student at Fordham Law
In this action, plaintiff Cablevision Systems New York
("Cablevision") alleges that defendant Catherine Collins
("Collins") violated the Cable Communications Policy Act, as
amended, 47 U.S.C. § 605(a) and 553(a)(1), by tampering with
Cablevision's television system in order to receive its private
telecommunications signals unlawfully through use of a "pirate"
converter device. After Collins failed to answer the complaint,
Your Honor entered a default judgment and referred the matter to
me to conduct an inquest regarding Cablevision's damages. (See
Docket No. 4). On August 27, 2002, I directed Cablevision to serve and file an
inquest memorandum by September 4, 2002, setting forth its proof
of damages, as well as its proposed findings of fact and
conclusions of law. The scheduling order gave Collins until
September 18, 2002, to respond. Although Cablevision's papers
were timely filed, Collins has neither filed any opposition
papers, nor had any contact with this Court.
As detailed below, I recommend that Cablevision be awarded a
total of $10,690, consisting of statutory damages in the amount
of $10,000 plus reasonable attorneys' fees and costs in the
amount of $690.
II. Standard of Review
In light of Collins' default, Cablevision's well-pleaded
allegations concerning issues other than damages must be accepted
as true. 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); Time Warner Cable of New York City v.
Barnes, 13 F. Supp.2d 543, 547 (S.D.N.Y. 1998); Cablevision
Sys. New York City Corp. v. Lokshin, 980 F. Supp. 107, 111
Additionally, although a plaintiff seeking to recover damages
against a defaulting defendant must prove its claim through the
submission of evidence, the Court need not hold a hearing as long
as (i) it has determined the proper rule for calculating damages,
see Credit Lyonnais Secs. (USA), Inc. v. Alcantara,
183 F.3d 151, 155 (2d Cir. 1999), and (ii) the plaintiff's evidence
establishes, with reasonable certainty, the basis for the damages specified in the default judgment. See
Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp.,
109 F.3d 105, 111 (2d Cir. 1997); Fustok v. ContiCommodity
Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989); see also
Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 53-54 (2d Cir.
1993) (inquest on damages without hearing improper where based
upon "single affidavit only partially based upon real numbers").
III. Factual Findings
On the basis of the complaint and Cablevision's inquest papers,
I find as follows:
Cablevision is a division of CSC Holdings, Inc., a Delaware
corporation, authorized to conduct business in New York, which
maintains its principal office at 1111 Stewart Avenue, Bethpage,
New York. (Compl. ¶ 4).
Collins, at all relevant times, resided at 2440 Boston Road,
Apt. 17K, Bronx, New York. (Id. ¶ 4; Aff. of Charles Carroll,
sworn to on Aug. 28, 2002 ("Carroll Aff."), ¶ 18).
Pursuant to government franchises, Cablevision constructs,
operates and maintains cable television systems in parts of Bronx
County as well as other counties. (Compl. ¶ 6). Cablevision
offers its customers various tiers of programming services
including "Basic," "Family," and "Optimum" which a subscriber may
purchase for a monthly fee. (Id. ¶ 7). "Basic" service provides
a subscriber with broadcast stations as well as a small number of
additional programming services. (Carroll Aff. ¶ 3). "Family" service is a higher level of programming that includes all of
Cablevision's services with the exception of "premium" and
pay-per-view programming. (Id.). "Optimum" service provides all
programming available under "Family" service and premium
stations. (Id.). A subscriber may pay for premium services at a
higher monthly rate, or may choose to purchase pay-per-view
programming for a pay-per-event fee in addition to the regular
monthly fee. (Id. ¶¶ 4-5). Premium services include channels
such as HBO, Cinemax and Showtime, and range in price from
approximately $1.95 to $14.95 per month, while packages of
premium services range in cost between $40.75 and $80.95. (Id.
¶ 4). Payper-view programming is offered continuously throughout
a 24-hour period and consists of individual movies and sporting
events. (Id. ¶ 5). The pay-per-view items typically cost a
subscriber between approximately $4.50 and $49.95 per selection.
(Id.). Over the course of a typical month, the aggregate value
of Cablevision's pay-per-view programs, assuming each is viewed
once, is hundreds of dollars. (Id.).
Satellites transmit the signals for Cablevision's cable
television services to Cablevision's reception facilities.
(Compl. ¶ 10). Those signals then are retransmitted to
subscriber's homes and businesses through a network of cable
wiring and equipment. (Id.).
Each subscriber is entitled to receive only the level of
programming and services that the subscriber has specifically
selected and purchased. (Carroll Aff. ¶ 7). The signals of that
specific programming are encoded or "scrambled" to prevent subscribers from receiving programming for which they have not
paid. (Id. ¶ 9). Cablevision provides each subscriber with a
converter-decoder box which is programmed by Cablevision to
decode only the services and programs that the subscriber has
purchased. (Id. ¶¶ 8, 10). Scrambled programming which has not
been purchased remains distorted and unviewable. (Id.).
Despite this scrambling technology, a pirate converter-decoder
can "descramble" Cablevision's signals so that the programming
can be seen without paying first. (Compl. ¶ 14). After commencing
an action against Mega Electronics ("Mega") for the sale and
distribution of such pirate converter-decoder devices,
Cablevision obtained records regarding the sale and shipment of
Mega's devices to purchasers across the country. (Carroll Aff. ¶¶
15-17). The records show that, on July 21, 1999, Collins
purchased two pirate converter-decoders from Mega. (Id. ¶ 19 &
Ex. C). The decoders purchased by Collins can be used to defeat
the encryption technology used by Cablevision in the Bronx.
(Id. ¶ 20).
Collins first subscribed to Cablevision's services on January
10, 1997. (Id. ¶ 18). In August 1999, one month after
purchasing the pirate Mega converters, Collins downgraded her
services from "Optimum Gold" to "Family" level. (Id. ¶ 18). In
March 2001, Collins added HBO, which she later removed in August
2001. Collins upgraded her service to the "Optimum" level in
October 2001, but later downgraded to the "Family" level in January 2002. (Id.). At the time of the
default judgment, Collins subscribed to the "Family" level of
service at a cost of $35 per month. (Id.).
For the foregoing services Collins paid Cablevision
approximately $35 per month from August 1999 to March 2001
(approximately 19 months), $46.95 per month from March 2001 to
August 2001 (approximately 5 months),*fn1 $35 per month from
August 2001 to October 2001 (approximately 2 months), $80 per
month from October 2001 to January 2002 (approximately 3
months)*fn2 and $35 per month from January 2002 to July 2002
(approximately 6 months). Therefore, after her purchase of the
pirate boxes through the date of the default judgment, Collins
paid Cablevision a total of $1,419.75 (($35 × 27 months)
($46.95 × 5 months) ($80 × 3 months)).
A. Statutory Damages
Sections 553 and 605 of Title 47 of the United States Code
prohibit the unauthorized interception and reception of cable
programming services.*fn3 Barnes, 13 F. Supp.2d at 547-48 (citing Int'l Cablevision, Inc. v. Sykes,
75 F.3d 123, 133 (2d Cir. 1996)); Lokshin, 980 F. Supp. at 112
("In contrast to Section 553, which by its statutory language
applies only to transmissions via cable systems, Section 605(a)
applies to the `interception of cable-borne, as well as
over-the-air, pay television' where cable-borne transmissions
originate as satellite transmissions. . . . Thus, when pay
television programming is transmitted over both cable and
satellite mediums, both statutes apply." (quoting Sykes, 75
F.3d at 130)).
When a court determines that a defendant has violated both
Sections 553 and 605, the aggrieved cable operator may recover
damages under only one of those sections. Sykes, 75 F.3d at
127; Barnes, 13 F. Supp.2d. at 548; American Cablevision of
Queens v. McGinn, 817 F. Supp. 317, 320 (E.D.N.Y. 1993). A
plaintiff may, however, elect to recover damages under Section
605 in consideration of its higher damages award. Sykes, 75
F.3d at 127; Barnes, 13 F. Supp.2d at 548.
In this case, Collins purchased two descrambling devices
capable of intercepting and receiving encrypted Cablevision
signals. Moreover, it is apparent that she used them since she
lowered her level of Cablevision service shortly after the
purchase. Cablevision holds proprietary rights in the
transmissions that Collins has intercepted and, therefore, is a "person aggrieved" within the
meaning of 47 U.S.C. § 553(c)(1) and 605(e)(3)(A).
Cablevision has elected to recover statutory damages under
Section 605. (Carroll Aff. ¶ 29). Section 605(e)(C)(3)(ii)
provides that the aggrieved party may recover no less than $1,000
and no more than $10,000 for each violation "as the court
considers just." Not surprisingly, Cablevision seeks to recover
the statutory maximum with respect to each Mega device, for a
total of $20,000. (Id.).
Because the statute offers little guidance as to how to
calculate damages, courts in this circuit have adopted two
approaches to assessing damages in cases of unauthorized
descrambling of signals by residential subscribers.
One approach has been to assess damages based on the difference
between the amount of service for which defendants paid monthly
and the amount their unauthorized use enabled them to receive
over the course of their misconduct. See Lokshin,
980 F. Supp. at 113 (finding award of $125 per month for pilfered
pay-per-view services to be reasonable); McGinn, 817 F. Supp.
at 320 (imposing statutory damages of $250 per month per
unauthorized decoder); Time Warner Cable of N.Y. v. Rivera, No.
94 Civ. 2339, 1995 WL 362429, at *4 (E.D.N.Y. June 8, 1995)
(Report & Rec. of Mag. J. Gold) (recommending approximately
$1,000 in damages for eight months of pay-perview programming);
Time Warner Cable of N.Y. v. Fland, No. 97 Civ. 7197, 1999 WL
1489144, at *4 (S.D.N.Y. Dec. 3, 1999) (Report & Rec. of Mag. J.
Grubin) ($71.55 per month in unpaid premium services and $225 per month in
pay-per-view services); Cablevision Sys. New York City Corp. v.
Santiago, No. 02 Civ. 322, 2003 WL 1882254, at *5-*6 (S.D.N.Y.
Mar. 17, 2003) (Report & Rec. of Mag. J. Freeman) ($45 per month
in unpaid premium services and $110 per month in pay-per-view
services). Other courts have awarded a flat sum based only on the
court's determination of the appropriate damages given the
circumstances of the case. Barnes, 13 F. Supp.2d at 548
(awarding a $1,000 flat sum); Time Warner Cable of N.Y.C. v.
Domsky, No. 96 Civ. 6851, 1997 WL 33374593, at *6-*7 (S.D.N.Y.
Sept. 2, 1997) ($1,000 in statutory damages per violation).
Although Collins' failure to submit any evidence makes it
impossible to determine the actual period during which Collins
was using at least one of her pirate decoders, it is reasonable
to assume that she began using them within one month after her
purchase when she downgraded her level of cable service. In the
absence of any showing to the contrary, it is also reasonable to
assume that she continued to use the pirate devices through the
date of the default judgment, despite the various changes in her
level of service. During that 35-month period the cost of
obtaining all of Cablevision's premium services was approximately
$80 per month. (Carroll Aff. ¶ 24). Collins would therefore have
likely paid $2,800 ($80 x 35 months) for such services had she
not used the unauthorized devices. During that period, however,
Collins paid Cablevision only $1,419.75. Thus, if one assumes
that Collins used her decoder boxes in this fashion, Cablevision's loss due to her unauthorized access of all its
premium programming other than pay-per-view is approximately
Estimating the amount of unauthorized pay-per-view programming
which Collins received is somewhat more difficult. Cablevision
claims that the aggregate value of each individual pay-per-view
program offered over a typical month, is hundreds of dollars.
(Carroll Aff. ¶ 5). Other courts in similar circumstances have
estimated the revenue that a cable operator lost with respect to
pay-per-view programming, based upon a reasonable assumption as
to the number of high-cost and low-cost events the defendant
likely watched each month. See, e.g., Lokshin, 980 F. Supp.
at 113 ($125 in pay-perview services per month based on an
estimate of 16 selections priced at $5 each and four selections
at an average cost of $11.25); see also Fland, 1999 WL
1489144, at *4 (estimating $225 in pay-per-view services each
month without explaining the breakdown of that estimate).
Consistent with these decisions, it is reasonable to assume that
Collins would not have purchased each pay-per-view program every
time it was shown, but, rather, would have watched at least three
minimum-cost events per month plus one maximum-cost event. This
would have resulted in an additional loss to Cablevision of
$63.45 per month (($4.50 × 3) $49.95) or $2,220.75 from August
1999 to July 2002 ($63.45 × 35 months).
The overall loss to Cablevision due to Collins' unauthorized
access, is therefore approximately $3,601 ($1380.25 $2220.75).
However, as Magistrate Judge Ellis noted in Domsky, 1997 WL 33374593, at *6, awarding
damages simply for the value of the services stolen by a
defendant "would not be sufficient deterrence" since the penalty
would merely be "the amount that should have been paid."
Accordingly, it is appropriate to double the monthly damages for
each month that Collins was likely using her illegal decoders.
Cablevision Sys. N.Y.C. Corp. v. Sencion, No. 01 Civ. 7069,
2001 WL 1586685, at *3 (S.D.N.Y. Dec. 12, 2001) (Stein, J.);
Domsky, 1997 WL 33374593, at *6. This would result in an award
of statutory damages in the amount of $7,202.
Finally, in this case, Collins purchased two pirate decoders.
Due to her default, it is unclear whether Collins used both
decoders at her home or gave the second one to another
Cablevision subscriber. In these circumstances, it is appropriate
to increase the statutory damages awarded, but doubling them
seems unduly harsh. Instead, I recommend that the amount of
statutory damages be increased to $10,000 (the statutory maximum
for one infringing device).
B. Attorneys' Fees
Cablevision also seeks attorneys' fees and costs in the amount
of $1,565. (See Affirm. of William, E. Primavera, Esq., dated
Aug. 30, 2002 ("Primavera Affirm."), ¶ 13). As the prevailing
aggrieved party, Cablevision is entitled to recover reasonable
attorneys' fees and costs. 47 U.S.C. § 605(e)(3)(B)(iii). When
fixing a reasonable rate for attorneys' fees, courts may consider
and apply prevailing market rates "for similar services by
lawyers of reasonably comparable skill, experience, and
reputation." Gierlinger v. Gleason, 160 F.3d 858, 882 (2d Cir. 1998)
(quoting Blum v. Stenson, 465 U.S. 886, 895 n. 11 (1984)).
Moreover, a court may rely on its own knowledge of private firm
hourly rates in estimating reasonable attorneys' fees. Miele v.
New York State Teamsters Cong. Pension & Ret. Fund,
831 F.2d 407, 409 (2d Cir. 1987).
In the Second Circuit, a party seeking an award of attorneys'
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 Ass'n for Retarded
Children, Inc. v. Carey, 711 F.2d 1136, 1154 (2d Cir. 1983).
Attorneys' fees applications that do not contain such supporting
data "should normally be disallowed." Id. at 1154; see also
Kingvision Pay-Per-View v. The Body Shop, No. 00 Civ. 1089,
2002 WL 393091, at *5 (S.D.N.Y. Mar. 13, 2002) (Swain, J.)
(denying award of attorneys' fees where information regarding how
the fees were accumulated was not provided even though requested
amount of $1,000 was reasonable).
In prosecuting this action, Cablevision availed itself of the
services of William E. Primavera an associate with Lefkowitz,
Louis & Sullivan, LLP. Primavera has submitted an affirmation
setting forth (a) his professional experience; (b) the
professional experience of the paralegals and legal assistants
who worked with him; (c) the prearranged fees that Cablevision
actually paid his employer for the work performed; and (d) the
billing rate at which Cablevision seeks to be compensated.
(Primavera Affirm. ¶¶ 2-13). The billing rates for each of the
timekeepers seem more than reasonable. Nevertheless, as I have indicated previously, (see
Cablevision Sys. New York City Corp. v. Diaz, No. 01 Civ. 4340,
2002 WL 31045855, at *4 (S.D.N.Y. July 10, 2002)), Cablevision is
not entitled to be compensated for its lawyer's flat-rate
In this case, Primavera has provided time sheets prepared by
the timekeepers who worked on this matter. (Id. Exs. D-H.). Two
of the time sheets do not reflect the actual hours expended,
(see id. Exs. D, H), and must be disallowed. See
Santiago, 2003 WL 1882254, at *7 (denying request for
attorneys' fees where plaintiff sought legal fees based on
flat-rate billing for certain work, but did not provide the
number of hours expended).
The time records of the Lefkowitz firm which reflect actual
hours expended relate to the work performed by four paralegals,
each of whom has an $85 per hour billing rate. Those records
indicate that Susan A. Weindler spent 0.3 hours (see Primavera
Affirm. ¶ 10 & Ex. F); Alfonso N. Cava spent 0.4 hours (see
id. ¶ 11 & Ex. G); Jeanine D. Colavito spent 0.3 hours (see
id. ¶ 11 & Ex. H); and Janine P. Zabbia spent 5 hours working
on this case. (See id. ¶ 9 & Ex. E). Accordingly, Cablevision
is entitled to recover $510 for the legal services rendered by
the Lefkowitz firm. ($85 x 6 hours).
Cablevision also seeks to recover $180 in costs, consisting of
$30 for service of process and the $150 filing fee. This request
is reasonable and should be allowed. IV. Conclusion
For the reasons set forth above, I recommend that Cablevision
be awarded damages in the amount of $10,690, consisting of
$10,000 in statutory damages, $510 for attorneys' fees, and $180
V. Notice of Procedure for Filing of Objections to this Report
The parties are hereby directed that if they have any
objections to this Report and Recommendation, they must, within
ten (10) days from today, make them in writing, file them with
the Clerk of the Court, and send copies to the chambers of the
Honorable Richard Owen, United States District Judge, 40 Centre
Street, New York, New York 10007, and to the chambers of the
undersigned, at the United States Courthouse, 500 Pearl Street,
New York, New York 10007, and to any opposing parties. See
28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(e), 72(b). Any
requests for an extension of time for filing objections must be
directed to Judge Owen. Any failure to file timely objections
will result in a waiver of those objections for purposes of
appeal. See Thomas v. Arn, 474 U.S. 140 (1985); Frank v.
Johnson, 968 F.2d 298, 300 (2d Cir. 1992);
28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(e), 72(b).