United States District Court, N.D. New York
Craig H. Norman, Esq., Wilhelm & Norman, PLLC, Cohoes, NY, for Plaintiff.
MEMORANDUM-DECISION AND ORDER
NORMAN A. MORDUE, Senior District Judge.
Plaintiff Joe Hand Promotions, Inc., moves for default judgment pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure. Dkt. No. 8. Plaintiff seeks statutory money damages pursuant to the Federal Communications Act of 1934, 47 U.S.C. §§ 553 and 605, for defendants' illegal interception of the Ultimate Fighting Championship 128: Maurici Rua v. Jon Jones, telecast March 19, 2011(the "Program"). According to the complaint, plaintiff held the "exclusive nationwide commercial distribution (closed-circuit) rights" to this Program and defendants illegally intercepted it and displayed it to five patrons at Duke Bazzel Tobacco & Lounge. Dkt. No. 1.
A default constitutes an admission of all well-pleaded factual allegations in the complaint, except for those relating to damages. Greyhound Exhibitgroup. Inc. v. E.L. U.L. Reality Corp., 973 F.2d 155, 158 (2d Cir. 1993); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). A default also effectively constitutes an admission that damages were proximately caused by the defaulting party's conduct: that is, the acts pleaded in a complaint violated the laws upon which a claim is based and caused injuries as alleged. See Au Bon Pain, 653 F.2d at 69-70. The movant need prove "only that the compensation sought relate to the damages that naturally flow from the injuries pleaded." Greyhound, 973 F.2d at 159.
A court must ensure that there is a reasonable basis for the damages specified in a default judgment. Actual damages or statutory damages may be assessed. In determining damages not susceptible to simple mathematical calculation, Fed.R.Civ.P. 55(b) (2) gives a court the discretion to determine whether an evidentiary hearing is necessary or whether to rely on detailed affidavits or documentary evidence. Action S.A. v. Marc Rich and Co., Inc., 951 F.2d 504, 508 (2d Cir. 1992) (quoting Fustok v. Conticommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989)). The moving party is entitled to all reasonable inferences from the evidence it offers. See Au Bon Pain, 653 F.2d at 65 (citing Trans World Airlines, Inc. v. Hughes, 308 F.Supp. 679, 683 (2d Cir.1969)).
Defendants have failed to answer plaintiff's complaint and plaintiff has obtained a Clerk's Entry of Default (Dkt. No. 7). Thus, the Court deems true all relevant and well-pleaded factual allegations in plaintiff's complaint. See H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 107 (2d Cir. 2006). The complaint sets forth well-pleaded facts supporting plaintiff's claim that defendants knowingly, willfully and unlawfully intercepted, received and displayed the Program at the time of its transmission at their commercial establishment. Defendants' default constitutes an admission of these factual allegations. See Au Bon Pain Corp., 653 F.2d at 65. Accordingly, plaintiff has demonstrated that it is entitled to the relief requested, that is, judgment against defendants, for any and all such damages recovered by the plaintiff herein, together with all costs and disbursements and attorney's fees in connection with this action.
After establishing liability, a court must conduct an inquiry to ascertain the amount of damages with reasonable certainty. Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir.1997). To determine the amount of damages in the context of a default judgment, "the court may conduct such hearings or order such references as it deems necessary and proper." Fed.R.Civ.P. 55(b)(2). "It [is] not necessary for the District Court to hold a hearing, as long as it ensured that there [is] a basis for the damages specified in the default judgment." Fustok, 873 F.2d at 40.
Plaintiff seeks an award of damages pursuant to 47 U.S.C. § 605(e)(3)(C)(ii) in the amount of $100, 000, an award of statutory damages pursuant to 47 U.S.C. § 553(c)(3)(A)(ii) in the amount of $10, 000 and additional damages pursuant to 47 U.S.C. § 553(c)(3)(B) in the amount of $50, 000, and an unspecified amount of damages for conversion. In exercising discretion in awarding damages, courts should be mindful of the difficulty in detecting such violations and the widespread problem of piracy. See Cablevision Sys. New York City Corp. v. Faschitti, No. 94 Civ. 6830(DC), 1996 WL 48689, at *2 (S.D.N.Y. Feb. 7, 1996). A court should therefore grant damages in an amount which achieves the deterrent purposes of the statute. See Cablevision Sys. New York City Corp. v. Lokshin, 980 F.Supp. 107, 113 (E.D.N.Y.1997).
Section 553 prohibits persons from intercepting or receiving "any communications service offered over a cable system, unless specifically authorized to do so...." 47 U.S.C. § 553(a)(1). Section 605 proscribes the unauthorized interception and publication of any "radio communication." See id. § 605(a). Defendants' default is deemed an admission of the use of an unauthorized device to intercept coded and scrambled internet transmissions. Greyhound, 973 F.2d at 158; Au Bon Pain Corp., 653 F.2d at 65; see also Transatlantic Marine Claims Agency, Inc., 109 F.3d at 108 (recognizing that the factual allegations ...