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KINGVISION PAY-PER-VIEW, LTD. v. MEDRANO

United States District Court, S.D. New York


July 12, 2004.

KINGVISION PAY-PER-VIEW, LTD., as Broadcast Licensee of the December 2, 2000 Trinidad/Vargas Program, Plaintiff,
v.
LUIS A. MEDRANO, ET Al., Defendants.

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

REPORT AND RECOMMENDATION

TO THE HONORABLE KIMBA M. WOOD, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

  In this action, Kingvision Pay-Per-View, Ltd. ("Kingvision") alleges that, on December 2, 2000, defendants By Choice Inc. d\b\a Garden of Roses a\k\a By Choice Bar & Restaurant ("By Choice"); Bernice Corral ("Corral"), individually, and as an officer, director, shareholder and/or principal of Chuleria's Den, Inc. d\b\a Chuleria's Den a\k\a Chuleria's Den/Hair Salon ("Chuleria's Den"); Chuleria's Den; Rosa Bassas ("Bassas"), individually and d\b\a Da Fifth a\k\a Da Fifth Sports ("Da Fifth"); Da Fifth; Helen Romero ("H. Romero") and Franklin Romero ("F. Romero"), individually and as officers, directors, shareholders and/or principals of Hair Konnexion Unisex, Inc. d\b\a Hair Konnexion Unisex ("Hair Konnexion"); Hair Konnexion; Joe's Barber Shop ("Joe's Barber"); Kim Weston ("Weston"), individually and d\b\a Palm Club a\k\a La Palm Club ("Palm Club"); Palm Club; Billiaids Club a\k\a Billiards Club ("Billiards Club"); Palermo Sports Bar & Café, Inc. d\b\a Palermo Sports Bar & Café ("Palermo Café"); Jesus Navarro ("Navarro") and Mario Balbuena ("Balbuena"), individually and d\b\a Los Angeles Puebla Mexico Restaurant a\k\a Puebla Mexico Restaurant a\k\a Producciones Madrid Jr. a\k\a Pueblo Mexico Restaurant ("Puebla Restaurant"); Puebla Restaurant; Master Johns Barber Shop ("Master Johns"); Ramon Caceres ("Caceres"), individually and as an officer, director, shareholder and/or principal of Mi Sabana Restaurant, Inc. d\b\a Mi Sabana Restaurant a\k\a Mi Sabana Restaurant & Sports Bar ("Mi Sabana"); Mi Sabana; Carmen Ruiz ("Ruiz"), individually and d\b\a Ruiz Restaurant a\k\a Ruiz-Cima Restaurant ("Ruiz Restaurant"); Ruiz Restaurant; Felicia Rodriguez ("Rodriguez"), individually and as an officer, director, shareholder and/or principal of La Vecina Restaurant, Inc. d\b\a Vecina Restaurant ("La Vecina"); La Vecina; Noemi Mejia ("Mejia"), individually and as an officer, director, shareholder and/or principal of Tacos El Caminero Restaurant, Inc. d\b\a Tacos El Caminero a\k\a Tacos & Caminero Restaurant ("El Caminero"); El Caminero; and Tejada-Mosquea Deli and Grocery Corp. ("Tejada"), d/b/a La Colonia Deli Food ("La Colonia"), (collectively "defendants"), engaged in the illegal interception of a transmission of a boxing match between Felix Trinidad and Fernando Vargas ("Trinidad/Vargas Fight"). Plaintiff contends that the defendants exhibited the event at the time of its transmission willfully and for the purposes of commercial advantage or private financial gain, in violation of the Cable Communications Policy Act ("Communications Act"), as amended, 47 U.S.C. § 553 and 605.

  Upon the defendants' failure to file an answer or otherwise respond to the Complaint, your Honor ordered that a default judgment be entered against them.*fn1 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 the defendants. The Court directed Kingvision to serve and file its proposed findings of fact and conclusions of law, and an inquest memorandum setting forth its proof of damages, costs of this action and its attorney's fees. Defendants were directed by the Court to serve and file any opposing memoranda, affidavits and exhibits, as well as any alternative findings of fact and conclusions of law they deemed appropriate.

  Plaintiff's submissions aver that it is entitled to $110,000 from each defendant: $10,000 in statutory damages and $100,000 in enhanced damages. In addition, plaintiff seeks from each defendant $219.92 in costs, as well as pre-judgment interest. Plaintiff also seeks reasonable attorney's fees. None of the defendants has filed any papers in opposition to the plaintiff's submissions.

  For the reasons set forth below, I recommend that Kingvision be awarded damages and costs against the defendants in the following amounts: By Choice in the amount of $6,219.92; Corral in the amount of $6,219.92; Chuleria's Den in the amount of $6,219.92; Bassas in the amount of $6,219.92; Da Fifth in the amount of $6,219.92; H. Romero and F. Romero in the amount of $6,219.92; Hair Konnexion in the amount of $6,219.92; Joe's Barber in the amount of $6,219.92; Weston in the amount of $6,219.92; Palm Club in the amount of $6,219.92; Billiards Club in the amount of $6,219.92; Palermo Café in the amount of $6,219.92; Navarro and Balbuena in the amount of $6,219.92; Puebla Restaurant in the amount of $6,219.92; Master Johns in the amount of $6,219.92; Caceres in the amount of $6,219.92; Mi Sabana in the amount of $6,219.92; Ruiz in the amount of $6,219.92; Ruiz Restaurant in the amount of $6,219.92; Rodriguez in the amount of $6,219.92; La Vecina in the amount of $6,219.92; Mejia in the amount of $6,219.92; El Caminero in the amount of $6,219.92; and Tejada/La Colonia in the amount of $6,219.92.

  Furthermore, I recommend that Kingvision be awarded pre-judgment interest on each award of damages, as set forth above, to be calculated at the statutory rate of nine percent (9%) per year, accruing on December 2, 2000. II. BACKGROUND AND FACTS

  Based on the submissions by the plaintiff, the Complaint filed in the instant action — the allegations of which, perforce of the defendants' default, must be accepted as true, 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) — and this Court's review of the entire court file in this action, the following findings of fact are made:

  Kingvision is a corporation organized and existing under the laws of the state of Delaware, with its principal place of business at 501 Fairway Drive, Deerfield Beach, Florida 33441. See Complaint, ¶ 5, at 9. By Choice is a commercial establishment, having its principal place of business at 1750 East 172nd Street, Bronx, New York 10472. Corral is an individual, having a principal residence at 615 West 173rd Street, New York, New York, 10033, and doing business as Chuleria's Den, a commercial establishment, having its principal place of business at 1812 Amsterdam Avenue, New York, New York 10031. Bassas is an individual, having a principal residence at 63 1B Adrian Avenue, Bronx, New York 10463, and doing business as Da Fifth, a commercial establishment, having its principal place of business at 2322 Amsterdam Avenue, New York, New York 10032.

  H. Romero and F. Romero are individuals, having a principal residence at 815 West 180th Street, New York, New York 10033, and doing business as Hair Konnexion, a commercial establishment, having its principal place of business at 3889 Broadway, New York, New York 10032. Joe's Barber is a commercial establishment, having its principal place of business at 2459 Frederick Douglas Boulevard, New York, New York 10027. Weston is an individual, doing business as Palm Club, a commercial establishment, having its principal place of business at 963 Prospect Avenue, Bronx, New York 10456. Billiards Club is a commercial establishment, having its principal place of business at 2285A Second Avenue, New York, New York 10035. Palermo Café is a commercial establishment, having its principal place of business at 1137 East Tremont Avenue, Bronx, New York 10460.

  Navarro and Balbuena are individuals, doing business as Puebla Restaurant, a commercial establishment, having its principal place of business at 1643 Lexington Avenue, New York, New York 10029-5303. Master Johns is a commercial establishment, having its principal place of business at 2261 Frederick Douglas Boulevard, New York, New York 10027. Caceres is an individual, doing business as Mi Sabana, a commercial establishment, having its principal place of business at 1460 Westchester Avenue, Bronx, New York 10472. Ruiz is an individual, doing business as Ruiz Restaurant, a commercial establishment, having its principal place of business at 1621 Lexington Avenue, New York, New York 10001. Rodriguez is an individual, doing business as La Vecina, a commercial establishment, having its principal place of business at 504 East Tremont Avenue, Bronx, New York 10457. Mejia is an individual, doing business as El Caminero, a commercial establishment, having its principal place of business at 1779 Lexington Avenue, New York, New York 10029-3214. Tejada is a commercial establishment, doing business as La Colonia, having its principal place of business at 2122 Second Avenue, New York, New York 10029-3206. See id., ¶¶ 10-17, 28-30, 41-47, 49-55, 61-63, 73-76, 87-89, 91-92, 98-110, and 116-120, at 9-12, 14-18, 20-25.

  Kingvision, by contract, was granted the exclusive right to distribute, by way of closed circuit television and encrypted satellite signal, the December 2, 2000 transmission of the Trinidad/Vargas Fight. See id., ¶ 130, at 26. Under the terms of the contract, the plaintiff was entitled to enter into agreements with various business entities in New York state which allowed these entities to exhibit the event publicly to their patrons. See id., ¶ 131, at 26. The cost to Kingvision of obtaining the exclusive right to distribute the event to the relevant venues in New York was substantial. See id., ¶ 132, at 26.

  The Complaint alleges that the defendants intercepted the television signal of the event unlawfully and exhibited it at their respective places of business, at the time of the transmission, knowingly, willfully and for the purposes of commercial advantage or private financial gain. See id., ¶¶ 133-134, at 27. The Complaint alleges further that the defendants modified a device, such as a satellite receiver, or used equipment, such as a cable converter box, to intercept the plaintiff's broadcast, knowing that such a modified device or piece of equipment was designed primarily to assist the unauthorized decryption of satellite cable programming or direct-to-home satellite services. See id., ¶¶ 141-142, at 28.

  According to the plaintiff, after it began to experience an erosion of sales of pay-per-view broadcasts to commercial establishments throughout the United States, and especially in New York, it endeavored to discover the cause of the loss. To this end, the plaintiff enlisted licensed private investigators. The plaintiff states that the cause of the erosion in its sales was determined to be the "piracy" of its broadcasts by unauthorized and unlicensed establishments. See Plaintiff's Inquest Memorandum, dated July 23, 2003, Exhibit F: Affidavit of Donna K. Westrich, Vice-President of Kingvision.

  The plaintiff avers that programming of the type it offers cannot be "mistakenly or innocently intercepted," and identifies various methods by which a "signal pirate" may intercept a television signal unlawfully. See id. These include: (a) the use of a "black box," which is purchased for a fee, and, when installed on a cable television line, will allow for the descrambled reception of a pay-per-view broadcast; (b) the purposeful misrepresentation of a commercial establishment as a residential property, making possible the purchase of a pay-per-view broadcast at a reduced rate; (c) the use of an illegal "cable drop" or "splice" from a residence adjacent to a commercial establishment, allowing a television broadcast that was purchased at a residential rate to be exhibited on the premises of the commercial establishment; or (d) the employment of any of the methods described above in connection with a "DSS Satellite System" or a "C-Band Satellite System." Id.

  The plaintiff contends that the defendants violated the Communications Act for purposes of commercial advantage or private financial gain, as evidenced by the following considerations. On the evening of the Trinidad/Vargas Fight, private investigators employed by the plaintiff observed: (i) 30 or 35 patrons at By Choice at approximately 9:35 p.m.; (ii) 12-15 patrons at Chuleria's Den at approximately 11 p.m.; (iii) 30-35 patrons at Da Fifth at approximately 10 p.m.; (iv) 40 patrons at Hair Konnexion at approximately 11:48 p.m.; (v) 10 patrons at Joe's Barber at approximately 9:40 p.m.; (vi) 50 patrons at Palm Club at approximately 10:30 p.m.; (vii) 15-20 patrons at Billiards Club at approximately 9:12 p.m.; (viii) 50 patrons at Palermo Café at approximately 9:35 p.m.; (ix) 30 patrons at Puebla Restaurant at approximately 11:45 p.m.; (x) 15 patrons at Master John's at approximately 12:07 a.m.; (xi) 50 patrons at Mi Sabana at approximately 9:57 p.m.; (xii) 30 patrons at Ruiz Restaurant at approximately 11:10 p.m.; (xiii) 35 patrons at La Vecina at approximately 9:40 p.m.; (xiv) 20-22 patrons at El Caminero at approximately 10:20 p.m.; and (xv) 10 patrons at Tejada/La Colonia at approximately 9:25 p.m. According to the investigators, the patrons at each establishment were watching either the Trinidad/Vargas Fight or pre-event programming. See Plaintiff's Inquest Memorandum, dated December 19, 2001, Exhibit C; Plaintiff's Inquest Memorandum, dated July 23, 2003, Exhibit A.

  The plaintiff argues that, given the public interest in these events, the defendants' displays of the events was likely to have led to an increased number of patrons. See Plaintiff's Inquest Memoranda. Consequently, the defendants could have been expected to receive enhanced revenues from the increased sales to their customers of food and beverages. See id. The plaintiff seeks statutory damages pursuant to 47 U.S.C. § 605(e) of $110,000 against each defendant, plus attorney's fees, costs and interest.

  III. CONCLUSIONS OF LAW

  47 U.S.C. § 553*fn2 and 605*fn3 both prohibit 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 and Noel, 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

  Kingvision's pay-per-view programming is sent to Kingvision from orbiting satellites. See Complaint ¶ 130, at 26. Accordingly, Kingvision's pay-per-view programming is protected from unauthorized reception under 47 U.S.C. § 605(a). See Barnes, 13 F. Supp.2d at 548 (citations omitted).

  In New York, commercial establishments were permitted to exhibit the Trinidad/Vargas Fight only if they had entered into the relevant license agreement with the plaintiff. The defendants were not among the commercial establishments that were authorized to exhibit the match on the date in question pursuant to the terms of such an agreement. Therefore, it is reasonable to conclude that the defendants knowingly intercepted the plaintiff's transmission of this event and exhibited it at their respective places of business at the time of the transmission. Accordingly, the plaintiff's submissions establish that the defendants violated 47 U.S.C. § 553(a)(1) and 605(a).

  Kingvision possesses "propriety rights" in the communication which the defendants intercepted, and is thus 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. 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 553 and 605, an aggrieved cable operator is entitled to elect to recover damages under section 605 in consideration of section 605's higher damages award. Barnes, 13 F. Supp.2d at 548 (citations omitted).

  Kingvision has elected to recover statutory damages against the defendants, rather than actual damages. 47 U.S.C. § 605(e)(3) authorizes the court to award statutory damages in an amount "not less than $1,000.00 or more than $10,000.00, as the court considers just." See 47 U.S.C. § 605(e)(3)(C)(i)(II). It provides further that the court has discretion to increase the award of damages by an amount of no more than $100,000 if it finds that the violation in question was committed willfully and for the purposes of commercial advantage or private financial gain. See 47 U.S.C. § 605(e)(3)(C)(ii).

  In this case, the plaintiff seeks the statutory maximum of $10,000 in damages against each defendant pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II). However, the plaintiff has not submitted evidence establishing the amount of the license fee required to broadcast the boxing event legally and, therefore, has failed to establish that it suffered any actual damages due to the defendants' conduct. For this reason, the Court finds that the statutory minimum of $1,000 in damages against each defendant is appropriate. See Kingvision Pay-Per-View, Ltd. v. Rodriguez, No. 02 Civ. 7972, 2003 WL 548891, at *2 (S.D.N.Y. Feb. 25, 2003) (awarding $1,000 in statutory damages in a similar case).

  With respect to the plaintiff's application for enhanced damages for conduct that is committed willfully and for the purposes of commercial advantage or private financial gain, the plaintiff's request should be granted. In order for the defendants to have received the closed-circuit broadcast, they had to have engaged in some deliberate act, such as modifying a device or using decoding equipment. Therefore, the defendants' conduct was willful. Further, while the plaintiff did not submit proof that the defendants had pirated other events or advertised the fight, its submissions establish that the defendants' displays of the boxing match were likely to have resulted in an increase in the number of patrons at each establishment, as well as an increase in sales of food and beverages. Accordingly, an additional award of $5,000 in enhanced damages should be assessed against each defendant. See Time Warner Cable of New York City v. Taco Rapido Restaurant, 988 F. Supp. 107, 112 (E.D.N.Y. 1997) (awarding $5,000 in enhanced damages in a similar case); Kingvision Pay-Per-View, Ltd. v. The Body Shop, No. 00 Civ. 1089, 2002 WL 393091, at *4 (S.D.N.Y. Mar. 13, 2002) (awarding $10,000 in enhanced damages); Rodriguez, 2003 WL 548891, at *2 (awarding $1,000 in enhanced damages).

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

  The plaintiff seeks reasonable attorney's fees from the defendants. However, the plaintiff does not support its request with documentation showing how such attorney's fees were incurred. Therefore, the plaintiff's failure to submit contemporaneous time records or other relevant data in support of its request for attorney's fees precludes such an award. See The Body Shop, 2002 WL 393091, at *5 (denying award of attorney's fees where records supporting the fee request were not provided).

  The plaintiff also requests $219.92, per defendant, for costs incurred in investigating this matter. This request is reasonable and should be granted. In addition, the plaintiff seeks to recover pre-judgment interest on the damages claimed to be due. The Court finds that, under New York law, pre-judgment interest at the rate of nine percent (9%) per year, from the date of the unauthorized showing of the Trinidad/Vargas Fight to the date judgment is entered, is reasonable and should be applied.*fn5 See New York Civil Practice Law and Rules ("CPLR") §§ 5001(b), 5004. IV. RECOMMENDATION

  For the reasons set forth above, I recommend an award to Kingvision of damages and costs against the following parties in the following amounts: By Choice in the amount of $6,219.92; Corral in the amount of $6,219.92; Chuleria's Den in the amount of $6,219.92; Bassas in the amount of $6,219.92; Da Fifth in the amount of $6,219.92; H. Romero and F. Romero in the amount of $6,219.92; Hair Konnexion in the amount of $6,219.92; Joe's Barber in the amount of $6,219.92; Weston in the amount of $6,219.92; Palm Club in the amount of $6,219.92; Billiards Club in the amount of $6,219.92; Palermo Café in the amount of $6,219.92; Navarro and Balbuena in the amount of $6,219.92; Puebla Restaurant in the amount of $6,219.92; Master Johns in the amount of $6,219.92; Caceres in the amount of $6,219.92; Mi Sabana in the amount of $6,219.92; Ruiz in the amount of $6,219.92; Ruiz Restaurant in the amount of $6,219.92; Rodriguez in the amount of $6,219.92; La Vecina in the amount of $6,219.92; Mejia in the amount of $6,219.92; El Caminero in the amount of $6,219.92; and Tejada/La Colonia in the amount of $6,219.92.

  Furthermore, I recommend that Kingvision be awarded pre-judgment interest on each award of $6,219.92, as set forth above, to be calculated by the Clerk of Court at a rate of nine percent (9%) per year, accruing on December 2, 2000.

  * * *

  The plaintiff shall serve each defendant with a copy of this Report and Recommendation and shall submit proof of service to the Court.

  V. FILING OF 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 Kimba M. Wood, United States District Judge, 500 Pearl Street, Room 1610, 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 Wood. 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. Herrmann, 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).


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