United States District Court, N.D. New York
August 3, 2004.
TIME WARNER ENTERTAINMENT/ADVANCE NEWHOUSE PARTERNSHIP, Plaintiff,
PETER STOCKTON, Defendant.
The opinion of the court was delivered by: FREDERICK SCULLIN, Chief Judge, District
MEMORANDUM-DECISION AND ORDER
Plaintiff, a cable television franchisee, alleges that
Defendant unlawfully intercepted its subscription-only cable
signals by purchasing and using an electronic decoder box
("decoder") in violation of the Communications Act,
47 U.S.C. § 553(a) and 605(a). Plaintiff alleges further that Defendant purchased six decoders and therefore also intended
to re-sell the decoders on the black market, a violation of
47 U.S.C. § 553(a)(2) and 605(e)(4).
Plaintiff's claims against Defendant arose after Plaintiff's
affiliate, Time Warner Cable of New York City ("TWCNYC"),
investigated a business called M.D. Electronics ("M.D."). Over
the course of the investigation, TWCNYC confirmed that M.D. was
engaged in the sale and distribution of "pirate" cable television
converter-decoders ("decoders"), i.e., devices that enable users
to view premium and pay-per-view cable programming without
authorization or payment. TWCNYC eventually obtained records of
M.D.'s sales of decoders, including sales in Plaintiff's
franchise area. Plaintiff subsequently identified M.D.'s
customers who purchased decoders and were also Plaintiff's
subscribers, including Defendant. On December 28, 2000, Plaintiff
commenced this action alleging that Defendant (1) used the
purchased decoders to intercept Plaintiff's premium and
pay-per-view programming services without its authorization and
without payment to it and (2) engaged in the sale and
distribution of the decoders.
Defendant failed to answer, and the Clerk entered default on
April 17, 2001. See Dkt. No. 4. The Court then moved for
dismissal for want of prosecution on January 9, 2003. See Dkt.
No. 5. Plaintiff responded by moving for default judgment on
March 24, 2003. See Dkt. No. 7. Defendant responded to the
motion via handwritten letter and indicated that he would like to
commence settlement negotiations; Plaintiff agreed. After
receiving no further correspondence from the parties, the Court
once again moved for dismissal for want of prosecution on
September 10, 2003. See Dkt. No. 12. Plaintiff responded,
requesting that the Court permit it to conduct discovery or re-file its default judgment motion. See Dkt. No.
13. The Court gave Defendant another opportunity to answer and
advised the parties that, if Defendant did not answer, Plaintiff
could re-file its motion for default judgment. Defendant did not
respond, and Plaintiff then moved for an inquest regarding
damages and re-filed its motion for default judgment. See Dkt.
No. 14. Defendant responded to the motion by letter on November
3, 2003. See Dkt. No. 15.
A. Default Judgment
The Federal Rules of Civil Procedure prescribe a two-step
process to enter judgment by default. See Thomas v. Sclavo,
S.P.A., No. 94CV1568, 1998 WL 51861, *2-*3 (N.D.N.Y. Feb. 4,
1998). Under Rule 55(a), a clerk must first enter the default
against a party who fails to plead or otherwise defend. See
Fed.R.Civ.P. 55(a). The party seeking entry of default must
provide evidence that the entry of default is appropriate. See
id. The second step in the process requires that a plaintiff
move the court for default judgment. See Thomas, 1998 WL 51861,
at *3. In considering a motion for default judgment, the court
will treat the well-pleaded factual allegations of the complaint
as true, and the court will then analyze those facts for their
sufficiency to state a claim. See id. at *3-*4 (citations
With these standards in mind, the Court will address
B. Plaintiff's Claims under the Communications Act of 1934,
47 U.S.C. § 553(a)(1) and 605(e)(4)
Both §§ 553 and 605 of the Communications Act prohibit
unauthorized reception of cable television programming and the sale of decoders. See, e.g.,
Cmty. Television Sys., Inc. v. Caruso, 284 F.3d 430, 435 (2d
Cir. 2002) (citing International Cablevision, Inc. v. Sykes
("Sykes II"), 75 F.3d 123, 131 n. 5, 133 (2d Cir. 1996)).
Specifically, §§ 553(a)(1) and 605(a) prohibit individuals from
receiving unauthorized cable programming and §§ 553(a)(2) and
605(e)(4) prohibit the sale of decoders. See
47 U.S.C. § 553(a)(1) and 605(a); see also 47 U.S.C. § 553(a)(2) and
The Second Circuit has held that liability attaches under these
sections regardless of whether the individual who sells the
decoder profits from the sales. See Int'l Cablevision, Inc. v.
Sykes, 998 F.2d 997, 1004 (2d Cir. 1993). Moreover, the
statute's prohibition on the sale of decoders extends both to
those who engage in the continuing business of selling decoders
and those who sell a single decoder. See id. Although § 553 has
a good-faith partial defense provision that allows a court to
reduce the award of damages if the violator was not aware and had
no reason to believe that he violated the statute, "there is no
suggestion in § 553(a)(1) that an unaware person even as thus
described in § 553(c)(3)(C) is exempted from liability. . . ."
Id. Thus, courts in this Circuit have consistently been very
reluctant to accept ignorance as a defense to liability under
these provisions. See, e.g., Kingvision v. Hansen, No. 02 Civ.
6587, 2004 WL 744230, *3 (S.D.N.Y. Apr. 5, 2004); Cablevision
Sys. New York City Corp. v. Cicero, No. 99 Civ. 3190, 2000 U.S.
Dist. LEXIS 21903, *17-*19 (S.D.N.Y. Aug. 28, 2000).
Plaintiff contends that Defendant (1) purchased six illegal
decoders, (2) used at least one of the decoders to view
Plaintiff's cable programming without authorization and payment,
and (3) sold decoders with knowledge that buyers would use them
to gain unauthorized access to cable service. In sum, Plaintiff
has produced evidence that Defendant ordered and received six
decoders from M.D. Electronics and, from this, asks the Court to infer
that Defendant retained one for his personal use and sold the
In his second letter to the Court, Defendant contends that he
believed that the decoders were legal when he purchased them, and
he turned the decoders over to Plaintiff during an amnesty
period. In addition, he contends that he purchased several
decoders because some of the decoders that he purchased did not
Defendant conceded in his letter to the Court that he purchased
and intended to use the decoders. He also acknowledged that he
used the decoders to view restricted programs on several
occasions. Although Defendant's argument that he did not know
that the decoders were unlawful may bear on the amount of damages
the Court imposes, his argument does not bear on the issue of
liability. See Cicero, 2000 U.S. Dist. LEXIS 21903, at *17-*19.
Although Defendant has also claimed that he is entitled to
amnesty because he turned his decoders over to Plaintiff, he did
not provide any evidence or even specific details regarding that
transaction. Accordingly, the Court grants Plaintiff a default
judgment on liability with respect to its claims under §§
553(a)(1) and 605(a), which prohibit individuals from receiving
unauthorized cable programming.
The remaining liability issue is whether Plaintiff is also
entitled to a default judgment with respect to its claims under
§§ 553(a)(2) and 605(e)(4), which prohibit the sale of decoders.
Courts in this Circuit are generally willing to grant a plaintiff
a presumption on this issue where the defendant purchased more
decoders than he ordinarily would use in his home. See, e.g.,
Time Warner Cable of New York City v. Papathanasis, No. 97 Civ.
3537, 1998 U.S. Dist. LEXIS 22672, *11 (S.D.N.Y. Sept. 23, 1998)
("Plaintiff has plausibly argued that the only reasonable
conclusion to be drawn from the possession of so many such
devices is that twenty-nine of the thirty devices purchased by defendant were sold or distributed to
third partes, and were not simply being used in a single
residence."); see also Cablevision Sys. Corp. v. De Palma, No.
CV-87-3528, 1989 WL 8165, *4 (E.D.N.Y. Jan. 17, 1989) ("[w]hile
[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."). This case is
distinguishable on the ground that, in contrast to the defendants
in Papathanasis and DePalma, who had purchased dozens of
decoders, Defendant only purchased six. However, Defendant did
not rebut Plaintiff's contention that he re-sold the decoders,
and he did not contend that he kept all six for his personal use.
Accordingly, the Court grants Plaintiff a default judgment with
respect to liability on its §§ 553(a)(2) and 605(e)(4) claims, as
C. Statutory Damages and Attorneys' Fees
The Communications Act authorizes statutory damages for
violations of its various provisions. See generally
47 U.S.C. § 553(c)(3)(A)(ii), 605(e)(3)(C)(i)(II). Where a defendant's
conduct violates both §§ 553 and 605, the damages provisions of §
605 apply. See Caruso, 284 F.3d at 435 (citations omitted);
TWC Cable Partners v. Multipurpose Elecs. Int'l, Inc., No.
CV-97-2568, 1997 WL 833471, *1 (E.D.N.Y. Oct. 6, 1997) (citation
omitted). Under § 605(e)(3)(C)(i)(II), violations of § 605(a)
carry statutory damages of not less than $1,000 or more than
$10,000 per violation, and violations of § 605(e)(4) carry
statutory damages of not less than $10,000 or more than $100,000
per violation. "The specific amount of statutory damages assessed
pursuant to section 605 rests within the sound discretion of the
court." Cablevision of S. Conn., Ltd. P'ship v. Smith,
141 F. Supp.2d 277, 286 (D. Conn. 2001) (citation omitted); Papathanasis, 1998 U.S. Dist. LEXIS 22672, at *12 (citations
Plaintiff has requested statutory damages. As stated above,
Plaintiff hypothesizes that Defendant retained one of the six
decoders for personal use and sold the remaining five. This
amounts to one violation of § 605(a), for which Plaintiff
requests an award of $10,000 (the statutory maximum) and five
violations of § 605(e)(4), for which Plaintiff requests an award
of a minimum of $10,000 per violation, or $50,000. Cf. Time
Warner Cable of New York City v. Browne, No. 00 CIV. 0412, 2000
WL 567015, *1 (May 10, 2000) (awarding $41,000 total in statutory
damages on default judgment for presumed sale of four
converter-decoders and retention of one for personal use).
Plaintiff additionally seeks to recoup costs and attorneys'
fees pursuant to 47 U.S.C. § 605(e)(3)(B)(iii), which provides
that a court "shall direct the recovery of full costs, including
the award of reasonable attorney's fees to an aggrieved party who
prevails." In support of its request, Plaintiff has provided
contemporaneous time records of work performed prosecuting the
instant action, as the Second Circuit requires. See TWC Cable
Partners, 1997 WL 833471, at *2 (citing New York State Ass'n
for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1147-48 (2d
Cir. 1983)). Based on these records, Plaintiff seeks to recoup
$1,681.50 in attorneys' fees, $150.00 in filing fees, and $30.92
in shipping fees.
Defendant did not address the issue of damages, costs, or
attorneys' fees in his letters to the Court. Therefore, before
awarding Plaintiff its requested damages, costs and/or attorneys'
fees, the Court will provide Defendant with the opportunity to
submit evidence with regard to this issue. IV. CONCLUSION
After carefully considering the file in this matter and the
parties' submissions, as well as the applicable law, and for the
reasons stated herein, the Court hereby
ORDERS that Plaintiff's motion for a default judgment against
Defendant Peter Stockton is GRANTED with respect to the issue
of liability; and the Court further
ORDERS that Defendant file and serve any opposition to
Plaintiff's request for damages, attorneys' fees and costs within
thirty days of the date of this Order.
IT IS SO ORDERED.
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