United States District Court, S.D. New York
June 30, 2004.
KINGVISION PAY-PER-VIEW LTD. as Broadcast Licensee of the March 1, 2003 Jones/Ruiz, Program, Plaintiff,
CARMEN CARDONA, et. ano, Defendants.
The opinion of the court was delivered by: FRANK MAAS, Magistrate Judge
REPORT AND RECOMMENDATION TO THE HONORABLE GEORGE B.
[fn*] This Report and Recommendation was prepared with the
assistance of Laureve Blackstone, a first-year student at
Brooklyn Law School.
In this action, plaintiff Kingvision Pay-Per-View, Ltd.
("Kingvision") alleges that, during the early morning hours of
March 2, 2003, defendant Los Amigos Del Encanto Corp., d/b/a Los
Amigos Del Encanto, a/k/a Amigo's Del Encanto Sports Bar ("Los
Amigos"), and its principal, defendant Carmen Cardona
("Cardona"), illegally intercepted satellite signals that were
being used by Kingvision to transmit a boxing match between two
boxers named Jones and Ruiz (the "Program"), thereby violating
the Cable Communications Policy Act ("Communications Act"), as
amended, 47 U.S.C. § 553(a)(1), 605(a) and 605(e)(4). On November 19, 2003,
Kingvision voluntarily discontinued its action against Cardona
insofar as she was named in her "individual capacity." (See
Docket No. 8).*fn1 Thereafter, a default judgment was
entered against Los Amigos, (Docket No. 9), and Your Honor
referred the matter to me for an inquest. (Docket No. 12).
By order dated January 7, 2004, I directed Kingvision to serve
and file an inquest memorandum by February 9, 2004, accompanied
by supporting affidavits and exhibits, setting forth its proof of
damages, as well as proposed findings of fact and conclusions of
law. (Docket No. 13). The order directed Los Amigos to respond by
February 23, 2004. (Id.). While Kingvision's papers were timely
filed, Los Amigos did not submit any opposition papers.
For the reasons set forth below, I recommend that Kingvision be
awarded judgment against defendant Los Amigos in the amount of
$12,165 consisting of $12,000 in statutory damages and $165 in
II. Standard of Review
In light of Los Amigos' default, Kingvision'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 (E.D.N.Y.
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
on the claim, 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
This action arises under 47 U.S.C. § 553 and 605. The Court
therefore has jurisdiction pursuant to 28 U.S.C. § 1331.
B. Los Amigos' Illegal Broadcast of the Program
Kingvision had a license to distribute the Program on March 1,
2003, via closed-circuit television and encrypted satellite
signal. (Compl. ¶ 12). Among the rights granted to Kingvision was
the right to allow other entities to broadcast the Program.
(Id. ¶ 13). During the early morning hours of March 2, 2003, Kingvision's
auditor, Keith Rauscher, visited the Los Amigos facility. (See
"Piracy" Aff. of Keith Rauscher, sworn to on Mar. 7, 2003, at 1).
Rauscher observed about twenty customers at Los Amigos who were
watching the Program on a television set. (Id. at 2). Los
Amigos was not authorized to receive the Program. (See Compl.
¶¶ 3, 8).
A. Los Amigos' Violations of 47 U.S.C. § 553 and 605
Sections 553*fn2 and 605*fn3 of Title 47 of the
United States Code prohibit the unauthorized interception and
reception of cable programming services. Time Warner Cable of
N.Y.C. v. Barnes, 13 F. Supp.2d 543, 547-48 (S.D.N.Y. 1998)
(citing Int'l Cablevision, Inc. v. Sykes, 75 F.3d 123, 133 (2d
Cir. 1996)); Cablevision Sys. N.Y.C. Corp. v. Lokshin,
980 F. Supp. 107, 112 (E.D.N.Y. 1997) ("In contrast to [S]ection 553,
which by its statutory language applies only to transmissions via
cable systems, [S]ection 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's conduct has violated
both Sections 553 and 605 of the Communications Act, a plaintiff
may recover damages under one of those sections only. Sykes, 75
F.3d at 127; Barnes 13 F. Supp.2d at 548; Am. Cablevision of
Queens v. McGinn, 817 F. Supp. 317, 320 (E.D.N.Y. 1993). An
aggrieved cable operator may, however, elect to recover damages
under Section 605 in consideration of its higher damages award.
Barnes, 13 F. Supp.2d at 548.
Kingvision's Program, which Los Amigos intercepted, originated
via satellite uplink and was sent to Kingvision via satellite
signal. (See Compl. ¶ 12). Although Kingvision suggests that
establishments like Los Amigos frequently use a "black box" or
"illegal cable drop or splice" from a nearby apartment or
commercial location, (see Aff. of Donna K. Westrich, sworn to
on July 22, 2003, ¶ 9), this is sheer supposition since the
signal could also have come from an illegal dish. In any event,
this is of little moment since Los Amigos plainly violated
Section 605(a). Moreover, Kingvision possesses "proprietary
rights" in the communications that Los Amigos intercepted without
authorization, and therefore is a "person aggrieved" within the
meaning of 47 U.S.C. § 553(c)(1) and 605(e)(3)(A).
Section 605(e)(3)(C)(i)(II) of Title 47, United States Code,
allows statutory damages for "each violation of subsection (a) of
this section . . . in a sum not less than $1,000 or more than
$10,000, as the court considers just. . . ." Additionally, if a
court finds that the statute was violated "willfully and for the
purpose of commercial advantage or private financial gain," it may, in its discretion, award an
additional sum, up to $10,000. Id. § 605(e)(3)(C)(ii).
Kingvision seeks the maximum statutory damages of $10,000, plus
enhanced damages for wilfulness in the amount of $100,000, or a
total of $110,000. (See Kingvision Mem. at 7). The damages to
be assessed pursuant to Section 605 rest within the sound
discretion of the Court. See Home Box Office v. Champs of New
Haven, Inc., 837 F. Supp. 480, 484 (D.Conn. 1993);
Entertainment by J&J, Inc. v. Mama Zee Restaurant & Catering
Services, Inc., No. 01 Civ. 3945 (RR)(SMG), 2002 WL 2022522, at
*3 (E.D.N.Y. May 21, 2002). Because the statute provides little
guidance on how damages should be assessed, some courts have
calculated statutory damages based on the number of patrons in
the establishment at the time of the violation. See, e.g.
Entertainment by J&J, Inc., v. Friends II, Inc., No. 02 Civ.
585 (JES)(RLE), 2003 WL 1990414 at *3 (S.D.N.Y. Apr. 25, 2003)
(awarding $20 per patron based on sublicensing fee per potential
patron); Entertainment by J&J, Inc. v. Nina's Restaurant and
Catering, 01 Civ. 5483 (KMW)(RLE), 2002 WL 1000286, at *3
(S.D.N.Y. May 9, 2002) (awarding $20 per patron); Time Warner
Cable of New York City v. Googies Luncheonette, Inc.,
77 F. Supp.2d 485, 490 (S.D.N.Y. 1999) (awarding $50 per patron).
Other courts have simply imposed damages in a flat amount. See,
e.g., Entertainment by J&J, Inc. v. Suriel, 01 Civ. 11460
(RO), 2003 WL 1090268, at *1 (S.D.N.Y. Mar. 11, 2003) (awarding
$11,000); King Vision Pay-Per-View Corp., Ltd. v. Papacito Lidia
Luncheonette, Inc., 01 Civ. 7575 (LAK)(AJP), 2001 WL 1558269, at
*2 (S.D.N.Y. Dec. 6, 2001) (awarding $20,000); Kingvision Pay-Per-View, Ltd. v. Jasper Grocery,
152 F. Supp.2d 438, 442 (S.D.N.Y. 2001) (awarding $15,000 in total
In a similar case referred by Your Honor last year, I opted to
calculate damages on a per patron basis. See Time Warner Cable
of New York City v. Sanchez, No. 02 Civ. 5855 (GBD)(FM), 2003 WL
21744089, at *4 (S.D.N.Y. July 8, 2003). Because there were 32
patrons viewing the boxing match, I calculated the cable
operator's damages as $640 (32 x $20), plus the $75 that it would
have cost the establishment to subscribe to monthly programming.
Id. I further increased the damages award to $1,000 because
this was the statutory minimum under Section 605. Id. Finally,
I recommended that the cable operator be awarded an additional
$5,000 for the defendant's wilfulness. Id.
Applying a similar analysis here would result in an equally low
award. I am persuaded, however, that a somewhat larger award is
warranted. In calculating damages in Sanchez, I did not
consider the fact that customers who could not watch the program
might have had to subscribe to the cable company's service or
enhance their level of viewership generating additional income
for the company. While Kingvision provides relatively little
information in this regard, it is reasonable to assume that such
loses could easily have surpassed $1,000. Additionally, the
uncertainty in this area is directly attributable to Los Amigos'
default. I therefore recommend that Kingvision be awarded damages
under Section 605(e)(3)(C)(i)(II) in the amount of $2,000. In Sanchez, I recommended that the damages be enhanced by
$5,000 due to the infringer's wilfulness. In arriving at this
amount, I noted that this was the only enhancement that the
plaintiff sought. See Sanchez, 2003 WL 21744089 at *3.
Kingvision is nevertheless entitled to a sum which will send the
message that cable piracy is impermissible. For that reason,
notwithstanding Sanchez, I recommend that Kingvision be awarded
an additional $10,000 in this case, for a total of $12,000.
B. Attorneys' Fees
Section 605 authorizes a court to "direct the recovery of full
costs including the award of reasonable attorneys' fees to an
aggrieved party who prevails." 47 U.S.C. § 605(e)(3)(B)(iii). In
this case, however, Kingvision has not sought attorney's fees in
its Inquest Memorandum.
Kingvision seeks to recover its investigative costs in the
amount of $137.50, which represents one-half of Mr. Rauscher's
fee. (See Aff. of Julie C. Lonstein, sworn to on November 3,
2003 ("Lonstein Aff."), ¶ 21). In federal court, the taxable
costs for which a party may seek reimbursement include the cost
of deposition and trial transcripts, service of process fees,
witness fees and mileage, interpreting fees, and certain small
photographs. See 28 U.S.C. § 1920; Fed.R.Civ.P. 54; Local
Civ. R. 54.1. There is no provision for a prevailing party to be
awarded the cost of its investigator. See Crawford Fitting Co.
v. J.T. Gibbons, Inc., 482 U.S. 437, 441-42 (1987) ("costs"
include only the specific items enumerated in 28 U.S.C. § 1920).
See also Whitfield v. Scully, 241 F.3d 264, 270-71 (2d Cir. 2001) (deference should be accorded to a
district court's interpretation of its own local rule).
Accordingly, the request to tax costs for the investigator's fee
must be denied.
In its papers, Kingvision has also requested service of process
fees of $90 and filing fees of $75. (See Lonstein Aff. ¶ 21).
Kingvision is plainly entitled to recover these costs and they
should be allowed. See Local Civ R. 54.1(c)(10).
For the reasons set forth above, Kingvision should be awarded
judgment against defendant Los Amigos in the amount of $12,165
consisting of $12,000 in statutory damages and $165 in costs.
VI. Notice of Procedure for Filing of Objections to this
Report and Recommendation
The parties are hereby directed that if they have any
objections to this Report and Recommendation, they must, within
ten days from today, make them in writing, file them with the
Clerk of the Court, and send copies to the chambers of the
Honorable George B. Daniels, United States District Judge, 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 Daniels. 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, 106 S.Ct. 466, 88 L.Ed.2d 435
(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).