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JOE HAND PROMOTIONS, INC. v. HERNANDEZ

June 30, 2004.

JOE HAND PROMOTIONS, INC. Plaintiff,
v.
JUAN B. HERNANDEZ et al., Defendants, JOE HAND PROMOTIONS, INC., Plaintiff, v. CARL REDDING et al., Defendants, JOE HAND PROMOTIONS, INC., Plaintiff, v. JOHN DOE et al., Defendants, JOE HAND PROMOTIONS, INC., Plaintiff, v. SHEIK BACCHUS et al., Defendants, JOE HAND PROMOTIONS, INC., Plaintiff, v. "JANE" ZOGAJ et al., Defendants. JOE HAND PROMOTIONS, INC., Plaintiff, v. SHEHA SHKURTE et al., Defendants, JOE HAND PROMOTIONS, INC., Plaintiff, v. CAROLINA DIFUCCIA et al., Defendants.



The opinion of the court was delivered by: HAROLD BAER, JR.[fn1], District Judge [fn1] Graham O'Donoghue, a Summer 2004 intern in my Chambers and second year law student at Columbia Law School, provided substantial assistance in the research and drafting of this Opinion.

OPINION & ORDER

Joe Hand Promotions, Inc. ("Joe Hand"), a distributor of satellite sports and entertainment programming, initiated seven suits against corporate and individual defendants for violating the Cable Communications Policy Act ("Communications Act"), as amended, 47 U.S.C. § 605 et seq., by illegally displaying a pay-per-view boxing match to its customers. These cases were consolidated by Order of the Court on November 24, 2003. Following a default in answering, Joe Hand moved for default judgment in four of the consolidated cases.*fn2 The issue now is the appropriate amount of damages. See 47 U.S.C. § 605(e)(3)(C)(i)(II) (which provides the statutory damages scheme for the piracy alleged in the complaint). Joe Hand requests statutory damages for alleged violations of 47 U.S.C. § 605(a) (prohibiting the display of pirated cable signals) and 47 U.S.C. § 605(e)(4) (prohibiting the modification of equipment for the purpose of intercepting cable signals). In addition, Joe Hand seeks enhanced damages pursuant to 47 U.S.C. § 605(e)(3)(C)(ii) (allowing increased damages when violations of § 605(a) are shown to be willful and pursued for commercial advantage). For the combined violations, Joe Hand now requests a total of $110,302.50 from each of the defaulting defendants. This represents the maximum statutory damages of $110,000, in addition to costs of $302.50. I have not found sufficient support for this figure in plaintiff's submissions, and the figure bears no relationship to the harm done to Joe Hand An award of $1,000 in statutory damages and $1,500 in enhanced damages, for a total of $2,500 against each defendant is appropriate.

I. BACKGROUND

  Joe Hand was granted the right to distribute the Tyson/Etienne boxing match ("the fight") held on February 22, 2003 via closed-circuit television. Concerned about the erosion of sales caused by cable piracy, Joe Hand employed auditors to visit New York locations suspected of illegally displaying the fight. Based on their reports, Joe Hand filed suit against each establishment and its principals. Joe Hand submitted supporting affidavits in each consolidated case. The allegations are much the same in each case: the auditor entered the defendant's establishment, witnessed a portion of the fight broadcast, took a head count of patrons at the establishment, and left shortly thereafter. None of the auditors was charged an admission fee to view the fight. The maximum number of patrons counted by the auditors at the establishments at issue in the three consolidated cases, Amy Ruth's Restaurant, Fish Chicken Restaurant 112th St., and Karagaqi Café were twenty, one, and twelve, respectively. II. DISCUSSION

  A. Default

  To date, the defendants in the three consolidated cases have failed to appear and the Clerk of the Court has already entered each party's default pursuant to Federal Rules of Civil Procedure ("Fed.R. Civ. P.") 55(a) on January 2, 2004. Fed.R.Civ.P. 55(b)(2) provides that when a party moves for judgment against an adverse party in default, the Court, in its discretion, may enter judgment against the defaulting party. Joe Hand has made such an application and the defendants in the three consolidated cases have shown no interest in responding to the complaint, or otherwise defending. Judgment by default is therefore appropriate.

  B. Standard of Review

  Following a default judgment, a defendant admits every "well-pleaded allegation" of the complaint as true, except those relating to damages. Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Flaks v. Koegel, 504 F.2d 702, 704 (2d Cir. 1974) ("While a default judgment constitutes an admission of liability, the quantum of damages remains to be established unless the amount is liquidated or susceptible of mathematical computation."). These are not liquidated damages, therefore the calculation of damages requires the Court to look beyond the averments of the complaint. Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999). The Court is required to examine the sufficiency of all evidence with respect to damages, and, when evidence is deemed insufficient, to ascertain the appropriate level of damages through its own inquiry. S.E.C. v. Mgmt. Dynamics, Inc., 515 F.2d 801, 814 (2d Cir. 1975) ("[U]nless the amount of damages are absolutely certain, the court is required to make an independent determination of the sum to be awarded."). To aid in this task, the Federal Rules of Civil Procedure provide that "the court may conduct such hearings or order such references as it deems necessary and proper. . . ." Fed.R.Civ.P. 55(b)(2). The Second Circuit has consistently held that "[b]y its terms, 55(b)(2) leaves the decision of whether a hearing is necessary to the discretion of the district court." Fustok v. Conticommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989); accord Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 53-54 (2d Cir. 1993); Action S.A. v. Marc Rich & Co., 951 F.2d 504, 508 (2d Cir. 1991).

  The evidence submitted by Joe Hand is sufficient to allow the Court to determine the appropriate quantum of damages without recourse to an inquest or further submissions by the parties. In particular, the affidavits of Joe Hand's investigators provide ample factual detail concerning the number of patrons present in each of the defendants' establishments, the maximum capacity of each establishment, and the use of entry fees (or, more accurately, non-use of such fees) at each establishment. These figures allow for a relatively simple calculation of damages for the individual defendants on a per-patron basis. Even if the record were devoid of such precise figures, an evidentiary hearing is not required where the court can "ensure[] that there [is] a basis for the damages specified in a default judgment." Fustok, 873 F.3d at 40. Because specific factual evidence bearing on the appropriate level of damages has already been submitted, and because further evidence would not materially effect the damages calculation, an inquest is not necessary.

  C. Calculation of Damages

  The Communications Act provides for statutory damages for violations of 47 U.S.C. § 605(a), (e)(4), and provides for additional enhanced damages for violations of 47 U.S.C. § 605(a). The amount of damages assessed under either provision rests within the sound discretion of the court. Time Warner Cable v. Taco Rapido Rest., 988 F. Supp. 107, 110 (E.D.N.Y. 1997).

  1. Statutory Damages

  Pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II), an aggrieved party may elect to recover statutory damages for violations of both 47 U.S.C. § 605(a) (prohibiting the display of pirated cable signals) and (e)(4) (prohibiting the modification of equipment for the purpose of intercepting cable signals). The range of damages set for violations of § 605(a) is $1,000 to $10,000, whereas the range set for violations of § 605(e)(4) is $10,000 to $100,000. For willful and financially motivated violations of § 605(a), 47 U.S.C. § 605(e)(3)(C)(ii) allows the Court to increase the damages award by up to $100,000. Joe Hand bases its request for $110,000 in damages on either of two alternative combinations of these statutory provisions. Joe Hand argues that the requested damages are warranted by combining the maximum amount allowed for a violation of § 605(a) ($10,000) with the maximum amount allowed for a violation of § 605(e)(4) ($100,000), or, alternatively, by enhancing the maximum damage award allowed for a violation of § 605(a) ($10,000) by the maximum amount allowed under § 605(e)(3)(C)(ii) ($100,000). In either case, plaintiff seeks a total of $110,000.

  When calculating damages under 47 U.S.C. § 605(e)(3)(C)(i)(II), some courts have used a patron-based estimation of actual damages, whereby the number of persons multiplied by a specific dollar amount for each serves as a proxy for plaintiff's loss. E.g., Time Warner Cable of New York City v. Googies Luncheonette, Inc., 77 F. Supp.2d 485 (S.D.N.Y. 1999) (awarding $50 per patron because that was approximately the amount charged residential purchasers); Taco Rapido Rest., 988 F. Supp. at 111 (awarding $50 per patron); Cablevision Sys. Corp. v. 45 Midland Enters., Inc., 858 F. Supp. 42, 45 (S.D.N.Y. 1994) (finding an award of $50 per patron to be "eminently reasonable"). Still, other courts ...


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