The opinion of the court was delivered by: Gold, S., U.S.M.J.
REPORT AND RECOMMENDATION
Plaintiff, Kingvision Pay-Per-View, Ltd. ("Kingvision"), brings this action alleging that defendants, Jose Jimenez, individually and d/b/a Al Azteca Restaurant a/k/a Azteca Restaurant a/k/a Azteca ("Azteca Restaurant"), and Azteca Restaurant, unlawfully intercepted and misappropriated a closed circuit television exhibition of a boxing match held on October 2, 2004 between Trinidad and Mayorga (the "event") in violation of the Federal Communications Act of 1934, codified as amended, 47 U.S.C. §§ 553 and 605. Compl. ¶¶ 1, 12, 15. More specifically, plaintiff alleges that defendants intercepted and received the event without paying the required fees, and displayed it to the patrons of Azteca Restaurant. Compl. ¶ 15.
Upon plaintiff's application and in light of defendants' failure to appear or otherwise defend in this action, the Clerk of the Court entered the default of defendants on December 16, 2005, and the Honorable Nicholas G. Garaufis referred this case to me for report and recommendation on the issue of damages as to the defaulting defendants. See Docket Entries 7, 8. Plaintiff has submitted a memorandum of law, dated December 10, 2005 ("Pl. Mem."), the affidavit of Donna K. Westrich, vice president of Kingvision, dated November 17, 2005 ("Westrich Aff."), an affidavit from an independent auditor, Cosmo Lubrano ("Lubrano Aff."), and the affidavit of Julie Cohen Lonstein, plaintiff's counsel, dated December 9, 2005 ("Lonstein Aff.") in support of its application for statutory damages and attorneys' fees and costs. Docket Entry 6. Defendants have not submitted any opposition to the relief sought by plaintiff.
Kingvision owns the distribution rights to the event which was broadcast via closed circuit television and encrypted satellite signal on October 2, 2004. Compl. ¶ 12; Pl. Mem. p. 2. Plaintiff entered into agreements with various commercial establishments in New York, allowing them to exhibit the event to their patrons in exchange for a fee. Compl. ¶¶ 13-14; Pl. Mem. p. 2. Defendants did not contract with plaintiff to legally broadcast the event. Pl. Mem. p. 2; Westrich Aff. ¶ 6.
Plaintiff hired an investigative agency, Signal Auditing, Inc., to visit various commercial establishments in the New York City area on the night of October 2, 2004, to identify establishments that unlawfully exhibited the event. Pl. Mem. p. 2; Westrich Aff. ¶¶ 4-5. An investigator witnessed the event being displayed on two television sets at Azteca Restaurant. See Pl. Mem. pp. 2-3; Westrich Aff. ¶ 7; Lubrano Aff. Plaintiff asserts that defendants used unauthorized decoding equipment to intercept the event without paying a fee to plaintiff. Compl. ¶ 16; Westrich Aff. ¶¶ 6, 10.
Once a default judgment is entered, a defendant is deemed to have admitted all of the well-pleaded allegations in the complaint pertaining to liability. See Greyhound Exhibitgroup, Inc., v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); Montcalm Pub. Corp. v. Ryan, 807 F. Supp. 975, 977 (S.D.N.Y. 1992).
The allegations of plaintiff's complaint clearly establish the elements of liability required to state claims under both 47 U.S.C. §§ 553(a)(1) and 605(a). Under Section 553(a)(1), "[n]o person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be specifically authorized by law." 47 U.S.C. § 553(a)(1). Section 553(a)(1) was intended by Congress to apply specifically to "'theft of services offered over a cable system[.]'" Int'l Cablevision, Inc. v. Sykes, 997 F.2d 998, 1008 (2d Cir. 1993) ("Sykes I") (emphasis in original) (quoting H.R. Rep. No. 934, at 83 (1984)). Thus, Section 553(a)(1) applies only to "'theft of a service from the point at which it is actually being distributed over a cable system.'" Id. Although they originate as satellite signals, plaintiff's transmissions are distributed via cable, and thus fall within the scope of Section 553(a)(1). See Compl. ¶ 12; Int'l Cablevision v. Sykes, 75 F.3d 123, 133 (2d Cir. 1996) ("Sykes II") (noting that Section 553(a) applies to any cable transmission, regardless of its origin). The plaintiff alleges that defendants illegally intercepted the event broadcast via cable and that they may have used one of the following methods: use of an illegal cable converter box or device, misrepresentation of a commercial establishment as a residence, or use of an illegal cable splice. Compl. ¶ 31; Westrich Aff. ¶ 10. These acts constitute violations of § 553(a)(1). See Sykes I, 997 F.2d at 1003 (noting that the use of illegal converter boxes is a violation of Section 553(a)(1)). Thus, plaintiff has established defendants' liability for a violation of Section 553(a)(1).
Section 605(a) is broader than Section 553(a)(1). Section 605(a) provides that "[n]o person not being authorized by the sender shall intercept any radio communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted communication to any person." 47 U.S.C. § 605(a). Section 605(a), which by its express terms prohibits unauthorized interception of interstate wire communications, has been held applicable to thefts of cable communications, provided that the cable programming originated as a radio communication. See Sykes II, 75 F.3d at 131 & n.5. Plaintiff alleges that the transmission of the event originated as a satellite communication and was transmitted via satellite signal. Compl. ¶ 12; Pl. Mem. p. 4. See also Kingvision Pay Per View, Ltd. v. Williams, 1 F. Supp. 2d 1481, 1484 (S.D. Ga. 1998) (noting that, under Section 605(a), "[t]he term 'radio' includes satellite transmissions.") (citing Nat'l Football League v. Alley, Inc., 624 F. Supp. 6, 9 (S.D. Fla. 1983)). As the cable transmissions here originated and were transmitted as satellite communications, Section 605(a) applies to defendants' interception of plaintiff's signal. Plaintiff alleges that defendants may have used one of the following methods to intercept the satellite broadcast of the event: use of an illegal satellite receiver, misrepresentation of a commercial establishment as a residence, use of an illegal decryption device, or an illegal purchase of satellite authorization codes. Compl. ¶¶ 15-16; Westrich Aff. ¶ 10. Plaintiff has properly pleaded a claim under Section 605(a) and defendants are thus deemed liable to plaintiff for violating this provision.
Although the allegations of a complaint pertaining to liability are deemed admitted upon entry of a default judgment, allegations relating to damages are not. See Greyhound Exhibitgroup, 973 F.2d at 158. Rather, claims for damages generally must be established in an evidentiary proceeding at which the defendant is afforded the opportunity to contest the amount claimed. See id. Thus, a court must ensure that there is a basis for the damages sought by a plaintiff before entering judgment in the amount demanded. See Fustok v. Conticommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989). A court may make this determination based upon evidence presented at a hearing or upon a review of detailed affidavits and documentary evidence. See FED. R. CIV. P. 55(b)(2); Action S.A. v. Marc Rich & Co., Inc., 951 F.2d 504, 508 (2d Cir. 1991); Fustok, ...