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GARDEN CITY BOXING CLUB, INC. v. SALCEDO

November 3, 2005.

GARDEN CITY BOXING CLUB, INC., Plaintiff,
v.
MARCO SALCEDO and TRIO BAR CORP., d/b/a CAFE MELAO, Defendants.



The opinion of the court was delivered by: DOUGLAS EATON, Magistrate Judge

OPINION AND ORDER

Plaintiff Garden City Boxing Club, Inc. ("Garden City") brought this action under 47 U.S.C. § 605 and § 553, alleging that the defendants illegally intercepted and exhibited plaintiff's November 8, 2003 closed circuit exhibition of the Tarver/Jones boxing match and its related bouts.

On January 31, 2005, the parties participated in a mediation and reached a settlement that required defendants to make two payments of $1,500 each to plaintiff. On April 20, 2005, Judge Berman granted defense counsel, Jason Pascal, permission to withdraw as counsel due to his inability to contact his clients.

  In a Memorandum and Order dated July 21, 2005, I granted a default judgment against Marcos Salcedo and Trio Bar Corp. d/b/a Café Melao. My Order directed: (1) the defendants to send me any opposing papers to plaintiff's motion in support of damages by September 30, 2005; and (2) the parties to notify me by September 30 if they wanted me to hold a hearing on October 28, 2005. To date, defendants have not served any opposition papers, and neither party has requested an inquest hearing.

  BACKGROUND

  Garden City owns the commercial rights to distribute the November 8, 2003 Tarver/Jones boxing match to commercial establishments for a licensing fee. To prevent unauthorized users from viewing its program, Garden City scrambled and distorted its satellite signals; commercial establishment subscribers to Garden City's programming paid a fee*fn1 and then were given either a decoder to view the event or (if they had a satellite dish) the satellite coordinates necessary to receive the signal. The defendants were not authorized to receive or broadcast the Tarver/Jones match. (Compl. ¶¶ 12-16; 6/20/05 Gagliardi Aff. ¶¶ 3-8.)

  On November 8, 2003, Keith Rauscher, an independent auditor hired by plaintiff to investigate establishments that unlawfully exhibited its program, entered Café Melao at 11:15 p.m. He observed one television displaying the end of the first round and the beginning of the second round of the Tarver/Jones fight. Café Melao did not have a cover charge, and there were 40 people inside the restaurant. Rauscher estimated that Café Melao's capacity was 200 people. He left at 11:20 p.m. (11/17/03 Rauscher Aff.; 6/20/05 Gagliardi Aff. ¶ 7.)

  DISCUSSION

  Upon the entry of a default judgment, the Court accepts as true all of the facts alleged in the complaint, except those relating to the amount of damages. See Au Bon Pain Corp. v. Artect Inc., 653 F.2d 61, 65 (2d Cir. 1981). An inquest is then conducted to determine the amount of damages.

  The Court may not award damages under both 47 U.S.C. § 605 and 47 U.S.C. § 553. International Cablevision, Inc. v. Sykes, 75 F.3d 123, 129 (2d Cir. 1996), cert. denied, Noel v. International Cablevision, Inc., 519 U.S. 929, 117 S.Ct. 298 (1996). If a defendant has violated both sections, then the Court should award damages only under Section 605, which has more severe penalties than Section 553. Sykes, 73 F.3d at 129. Thus, I will discuss only Section 605 and the plaintiff's remedies under it.

  47 U.S.C. § 605(a) states, in part:
No person not being authorized by the sender shall intercept any radio communication and divulge or publish the existence, contents, substance . . . of such intercepted communication to any person. No person not being entitled thereto shall receive any . . . communication by radio and use such communication . . . for his own benefit or for the benefit of another not entitled thereto. . . .
47 U.S.C. § 605(e) (3) (C) (i) (II) provides that an aggrieved party may recover an award of statutory damages for each violation of subsection (a), in an amount between $1,000 and $10,000 as the Court considers just. The statute further provides that the Court "in its discretion may increase the award of damages . . . by an amount of not more than $100,000" where the Court finds that the defendant's violation "was committed willfully and for purposes of direct or indirect commercial advantage or private financial gain." See 47 U.S.C. § 605(e) (3) (C) (ii).

  In three other inquests involving a similar fact pattern, I followed Magistrate Judge Pitman's lead and awarded a set dollar amount of $300.00 per patron. See Entertainment by J&J v. Rosario, 01 Civ. 5485 (JSM) (DFE) (May 20, 2003); Top Rank, Inc. v. Caceres, 01 Civ. 8426 (HB)(DFE) (Mar. 19, 2002); KingVision Pay-Per-View, Ltd. v. Acogedor Cibao Restaurant, 99 Civ. 10095 (RMB) (DFE) (S.D.N.Y. November 28, 2001). In those three inquests, Judge Martin, Judge Baer and Judge Berman adopted my Reports in their entirety. I note that Judge Dolinger recently used this approach as well. See Garden City Boxing Club, Inc. v. Alicea, 04 Civ. 2084 (RMB) (DFE) (June 6, 2005).

  In Cablevision Systems New York City Corporation v. Jose Cateras d/b/a Acogedor Cibao Restaurant, 97 Civ. 7199 (LAK) (HBP), at ¶ 28 (S.D.N.Y. May 1, 1998), Magistrate Judge Pitman recommended that under 47 U.S.C. § 605(e) (3) (C) (i) (I) and (II), Cablevision Systems should be awarded $300.00 per patron for the defendant's illegal interception and public display of a 1996 boxing match. Judge Pitman wrote at ¶ 28:
I recommend this figure because although defendant's violation was serious and intentional, it appears that defendant's establishment is small and defendant's financial gain was minimal. [Footnote 2] Although I agree with plaintiff that defendant's conduct should not be tolerated and that considerations of general deterrence are relevant to the determination of the amount of the penalty, I do not believe that defendant's violation is so serious as to warrant the imposition of a penalty that would necessarily drive defendant out of business. See New Contenders, Inc. v. Diaz Seafood Corp., 96 Civ. 4701 (AGS) (HP), 1997 WL 538827 at *2 (S.D.N.Y. Sept. 2, 1997) . . .
At Footnote 2, Judge Pitman wrote:
I assume that one of the reasons defendant illegally intercepted the Return of the Legends Event was to profit from increased sales of food and drink. However, even if I make the generous assumption that each of the twenty-two patrons ordered $100 worth of food and drink, the damages figure I recommend will still result in disgorgement of defendant's profits several times over.
Judge Kaplan adopted Judge Pitman's Report and Recommendation on May 19, 1998.

  In the case at bar, plaintiff's investigator reported that there were 40 people in defendants' establishment. At $300.00 per patron this would lead to $12,000.00, but instead I ...


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