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J&J Sports Productions, Inc. v. Exclusive Lounge & Grill Inc.

United States District Court, E.D. New York

March 22, 2017

J & J SPORTS PRODUCTIONS, INC. Plaintiff,
v.
EXCLUSIVE LOUNGE & GRILL INC and JENNIFER CRAYTON Defendants.

          MEMORANDUM AND ORDER

          GLASSER, Senior United States District Judge:

         Plaintiff J & J Sports Productions, Inc. (“J & J” or “Plaintiff”) alleges violations of the Federal Communications Act of 1934, codified at 47 U.S.C. §§ 553 and 605, against defendants Exclusive Lounge & Grill Inc (“Exclusive Lounge”) and its principal, Jennifer Crayton (“Crayton”). Defendants were duly served but failed to appear. J & J obtained a certificate of default and now moves the Court to enter default judgment and award damages. For the reasons stated herein, Plaintiff's motion is DENIED.

         BACKGROUND

         Plaintiff has initiated hundreds of cases in this District, and has moved for default judgment in over one hundred of them. J & J licenses the rights to exhibit closed-circuit, pay-per-view television events that are not available for viewing by the general public. ECF 1, Complaint (“Complt.”), at ¶ 10. Commercial establishments contract with J & J to access a closed-circuit event and televise it to their clientele in exchange for a fee. Id. at ¶ 11. Transmission of an event is electronically coded, and can only be accessed with electronic decoding equipment provided to those establishments that contract with J & J. Id. at ¶¶ 12, 14.

         J & J alleges that it owned the exclusive distribution rights in New York to the September 14, 2013 boxing match between Floyd Mayweather Jr. and Saul Alvarez, a/k/a “Canelo, ” (the “Event”). Id. at ¶ 7. J & J claims that the license agreement allowed it “to sublicense the rights to the marketing and/or sales to the eventual exhibitors of the fight, ” and that “[i]n this particular case the plaintiff utilized the services of G & G Closed Circuit Events, LLC to handle its marketing and sales.” Id. at ¶ 9. It is alleged that both J & J and G & G “contracted with various establishments throughout New York and granted to such establishments the right to broadcast the Event in exchange for a fee.” Id. at ¶ 11. All commercial establishments in New York that exhibited the Event were required to obtain authorization from J & J, “and/or its sub-licensee G & G Closed Circuit Events, LLC.” Id. at ¶¶ 7, 10.

         The Event was advertised on a rate sheet that was filed with this motion (the “Rate Sheet”). ECF 10-3. The Rate Sheet displays a logo for G & G Closed Circuit Events, LLC (“G & G”) and lists the costs to televise the Event based on the capacity of the establishment. Id. The Rate Sheet states that commercial locations are required to obtain a license “from the OFFICIAL CLOSED-CIRCUIT PROVIDER, G & G Closed Circuit Events, Inc., ” that “[t]here is NO OTHER LEGAL LICENSOR, ” and that “[a]ny location that has not been licensed by this provider will be considered a PIRATE and TREATED ACCORDINGLY.” Id. The Rate Sheet also provides contact information for Art Gallegos, the Vice President of G & G. Id. The Rate Sheet makes no mention of J & J, nor do those initials appears on that sheet.

         Exclusive Lounge is a restaurant located in Queens, New York. Complt at ¶ 5. J & J alleges that Exclusive Lounge did not obtain the required authorization from J & J, or G & G, to broadcast the Event, but nonetheless intercepted and televised the Event on its premises. Id. at ¶¶ 13, 15. J & J submits an affidavit from a third party auditor who swears she visited Exclusive Lounge on September 15, 2013 at 1:26 a.m. and witnessed a broadcast of the boxing match “Mayweather vs. Canelo, ”[1] while at least 75 patrons were present. ECF 10-2.[2]

         J & J initiated this action on November 16, 2015, alleging various violations of the Federal Communications Act, 47 U.S.C. §§ 553 and 605. Defendants were duly served on December 21, 2015, but never appeared.[3] ECF 5, 6. On January 27, 2016, Magistrate Judge Scanlon ordered Plaintiff to move for a certificate of default within thirty days and, subsequently, for default judgment. See ECF Entry dated Jan. 27, 2016. She also ordered that:

Any submission in support of a default judgment must address the exclusive license issue identified in J & J Sports Production, Inc. v. El Ojo Agua Corp., 13 Civ. 6173, 2014 WL 4700014 (E.D.N.Y. Aug. 29, 2014); J & J Sports Productions, Inc. v. Sur Lounge Cafe Inc., 15 Civ. 2494 (SJ)(RLM) (Sept. 4, 2015), report and recommendation adopted (E.D.N.Y. Sept. 30, 2015); J & J Sports Productions, Inc. v. Raquel Restaurant Corp., 15 Civ. 2497 (ARR) (RLM), (E.D.N.Y. Sept. 4, 2015), report and recommendation not adopted as case voluntarily discontinued.

Id. (discussed in detail, infra). A certificate of default was entered on February 23, 2016 (ECF 8), and J & J moved for default judgment on April 5, 2016. ECF 11.

         LEGAL STANDARD

         Rule 55 of the Federal Rules of Civil Procedure prescribes a two-step process for obtaining a default judgment. Step one requires the court clerk to enter the defendant's default “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend.” Fed.R.Civ.P. § 55(a). Plaintiff then moves for default judgment, and it “remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action.” Labarbera v. ASTC Labs., Inc., 752 F.Supp.2d 263, 270 (E.D.N.Y. 2010) (internal quotation marks omitted); see also Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009).

         A plaintiff's default is a “concession of all well pleaded allegations of liability.” Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). However, a default does not excuse defects in plaintiff's pleadings, and allegations are not conceded if demonstrated to be false by evidence on the record. In re Wildlife Ctr., Inc., 102 B.R. 321, 325 (Bankr. E.D.N.Y. 1989). Indeed, “[a]llegations are not well pleaded which are contrary to uncontroverted material in the file of the case.'” Getty Images (US) Inc. v. Advernet, Inc., 797 F.Supp.2d 399, 439 (S.D.N.Y. 2011); see also J & J Sports Prods., Inc. ...


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