Cablevision Systems New York City Corp. v. Lokshin
| Decision Date | 16 July 1997 |
| Docket Number | No. 96 CV 0555(SJ).,96 CV 0555(SJ). |
| Citation | 980 F.Supp. 107 |
| Parties | CABLEVISION SYSTEMS NEW YORK CITY CORPORATION, Plaintiff, v. Yury LOKSHIN, Defendant. |
| Court | U.S. District Court — Eastern District of New York |
Daniel J. Lefkowitz, Jericho, NY by James T. Ausili, for Plaintiff.
Yury Lokshin, Brooklyn, NY, pro se.
After reviewing the record, and having received no objections from the parties, the Court hereby affirms and adopts in part the Report and Recommendation issued by Magistrate Judge Go on May 29, 1997 in the above-referenced matter. The Court agrees with the findings and conclusions set forth in the Report and Recommendation, and in particular, with Magistrate Judge Go's finding under 47 U.S.C. § 553(c)(3)(B) that defendant's conduct in intercepting and receiving plaintiff's private cable telecommunications signals was willful and for purposes of private financial gain. Report and Recommendation at 114-115.
Although some courts have found that individual defendants who use stolen cable services solely for their own benefit and at their own residences are not subject to enhanced damages under 47 U.S.C. § 553(c)(3)(B), see, e.g., Time Warner Cable of New York v. Rivera, No. 94 Civ. 2339, 1995 WL 362429, at *4 (E.D.N.Y. June 8, 1995); American Cablevision of Queens v. McGinn, 817 F.Supp. 317, 320 (E.D.N.Y. 1993), the Court agrees with Magistrate Judge Go's statutory analysis in support of finding that such conduct may be interpreted as being for the purpose of private financial gain. See Report and Recommendation at 114-115.
In exercising its discretion to award enhanced damages, the Court notes the particular circumstance in this case that a maximum award of statutory damages, $10,000.00, approximates the actual value of free services that the defendant may have received over six years. Because Section 553(a)(1) was specifically enacted to address the "major problem" of theft of cable services, see Cablevision Systems Corp. v. Maxie's North Shore Deli Corp., No. 88 Civ. 2834, 1991 WL 58350 at *1 (E.D.N.Y. Mar.20, 1991) (quoting H.R.Rep. No. 98-934, at 83 (1984), reprinted in 1984 U.S.C.C.A.N. 4655, 4720), it seems especially appropriate in this case to go beyond an award of maximum statutory damages in order to deter the defendant and others from future theft of cable services. The Court, however, declines to adopt Magistrate Judge Go's recommendation that enhanced damages of $10,000.00 be imposed, and instead awards plaintiff enhanced damages in the amount of $1,500.00.
Accordingly, it is hereby
ORDERED that plaintiff be awarded:
(1) $10,000.00 in statutory damages pursuant to 47 U.S.C. § 553(c)(3)(A)(ii); (2) $1,500.00 enhanced damages pursuant to 47 U.S.C. § 553(c)(3)(B); (3) $1,503.06 in attorneys' fees; and (4) $20.00 in costs. The Clerk of the Court is directed to enter judgment in this case against defendant Yury Lokshin in the amount of $13,023.06, and to close this case.
SO ORDERED.
REPORT AND RECOMMENDATION
Plaintiff, Cablevision Systems New York City Corporation (hereinafter referred to as "Cablevision" or "plaintiff"), brought this action against the twenty named defendants1 alleging violations of Title 47 of the United States Code. In its complaint, plaintiff alleges that defendants intercepted and received plaintiff's private cable telecommunications signals without plaintiff's authorization through the use of a compatible bootleg cable television decoder, in violation of sections 553(a)(1) and 605(a) of Title 47.
On July 24, 1996, the Honorable Sterling Johnson granted plaintiff's request for entry of default against defendant Yury Lokshin ("Lokshin"), who failed to file an answer or otherwise respond to the complaint, but referred determination of the amount of the judgment to me for report and recommendation. Judge Johnson also enjoined Lokshin from continuing to use the decoder to intercept plaintiff's private cable telecommunications signals.
For the following reasons, I respectfully recommend that plaintiff be awarded statutory damages against defendant Yury Lokshin pursuant to 47 U.S.C. § 553(c)(3) in the amount of $20,000 and attorneys' fees and costs of $1,543.06.
The facts pertinent to determination of this motion are set forth in the Complaint; the November 18, 1996 affidavit of Harry Maxwell, the former Director of Security for plaintiff ("Maxwell Aff."); the November 22, 1996 affidavit of James T. Ausili, Esq., plaintiff's counsel; the February 19, 1996 affidavit of service ("Service Aff."); and the September 11, 1996 certificate of default by the clerk ("Certificate of Default"). Lokshin did not file any opposition to plaintiff's application nor respond in any way during the pendency of either this action both before and after being served notice of plaintiff's motion for default judgment. See Service Aff. My findings of fact are as follows:
Cablevision is a cable television operator which has been awarded franchises by the City of New York to construct, operate and maintain cable television systems in parts of Kings County, New York. It offers cable television programming services to subscribers at different monthly charges depending upon the level of services requested. Complaint at ¶ 6; Maxwell Aff. at ¶ 2. "Basic" service allows the subscriber to receive plaintiff's programming services with the exception of premium and Pay-Per-View programming services. "Optimum" service (formerly "Rainbow") service includes basic and all of plaintiff's premium programming services with the exception of Showtime, Cinemax, and Pay-Per-View programming. "Optimum Gold" allows a subscriber to receive "Optimum" level of service plus either Cinemax or Showtime, while "Optimum Preferred" includes "Optimum" level of service plus both Cinemax and Showtime. Maxwell Aff. at ¶¶ 4-5. Cablevision also offers Pay-Per-View Programs throughout the day which typically range between $4.00 and $39.99 per selection. Id. at ¶ 18.
Cablevision transmits the signals for all its cable television services to subscribers' homes through a network of cable wiring and equipment (the "System"). In order to protect its programming services against unauthorized reception, Cablevision encodes or "scrambles" the signals and provides each subscriber with a device known as a "converter" to enable subscribers to receive programs on their television sets. Complaint at ¶¶ 10-11; Maxwell Aff. at ¶ 11. Each converter contains a "descrambler" or "decoder" to decode scrambled service so that each subscriber receives only the level of programming services he or she selects and purchases. Complaint at ¶ 9. Programming services not purchased remain scrambled and unviewable on the subscriber's television set.
The agreements between Cablevision and its subscribers forbid unauthorized tampering with Cablevision's equipment. Cablevision however, ordinarily cannot detect use of pirate descramblers without a subscriber's affirmative permission to conduct an on-site inspection. Maxwell Aff. at ¶ 9.
In 1991, the Federal Bureau of Investigations executed a search warrant on the Offices of Global Cable Network ("Global") and obtained its sales records. Id. at ¶ 14. After Global and its principal, Eric Neplokh, were indicted and pleaded guilty to violations of 47 U.S.C. § 302A for the sale of cable television devices in violation of FCC regulations, copies of Global's business records were forwarded to cable operators throughout the United States, including Cablevision. Id. at ¶ 15.
Global's records indicated that on January 16, 1991, Lokshin purchased an unauthorized two-piece cable television decoding device. Maxwell Aff. at ¶ 16. Two weeks after the purchase of the pirate descrambling device from Global, Lokshin downgraded his cable service to "Basic" service, which at the time cost $9.95 per month. Id. at ¶ 17.
Lokshin previously received the "Rainbow" level of service, which allowed him to receive all of plaintiff's premium programming services with the exception of Showtime, Cinemax, and Pay-Per-View programming, at a monthly average charge prior to that time of $46.95. Id. Lokshin ordered an average of ten Pay-Per-View events per month between December 21, 1989 and December 28, 1990. Id.
Lokshin still subscribes for only "Basic" service and pays $13.95 per month. Id. at ¶ 17. Since 1991, Lokshin has been receiving plaintiff's premium and Pay-Per-View services without authorization, or payment. The price difference between the paid for basic service and the unauthorized premium service that Lokshin currently receives is valued at approximately $48.00 per month. If all Pay-Per-View programs were selected, the monthly cost would be hundreds of dollars. Id. at ¶ 18.
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. Realty Corp., 973 F.2d 155, 158 (2d Cir.), cert. denied, 506 U.S. 1080, 113 S.Ct. 1049, 122 L.Ed.2d 357 (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. Id. 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.
The court must ensure that there is a basis for the damages specified in a default judgment. 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 & Co.,...
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