Circuito Cerrado, Inc. v. Pizzeria Y Pupuseria Santa Rosita, Inc.

• Decision Date: 14 March 2011
• Docket Number: No. 10 CV 108(DRH)(AKT).,10 CV 108(DRH)(AKT).
• Citation: 804 F.Supp.2d 108
• Parties: CIRCUITO CERRADO, INC., Plaintiff, v. PIZZERIA Y PUPUSERIA SANTA ROSITA, INC., d/b/a, Santa Rosita Restaurante y Pupuseria, and Noe G. Valle, Defendants.
• Court: U.S. District Court — Eastern District of New York

804 F.Supp.2d 108

CIRCUITO CERRADO, INC., Plaintiff,

v.PIZZERIA Y PUPUSERIA SANTA ROSITA, INC., d/b/a, Santa Rosita Restaurante y Pupuseria, and Noe G. Valle, Defendants.

No. 10 CV 108(DRH)(AKT).

United States District Court, E.D. New York.

March 14, 2011.

Paul J. Hooten, Paul J. Hooten & Associates, Mt. Sinai, NY, for Plaintiff.

ORDER

HURLEY, Senior District Judge:

By Order dated July 15, 2010, the Court entered a default judgment against defendants and referred this matter to Magistrate Judge Tomlinson, pursuant to 28 U.S.C. § 636, for a Report and Recommendation as to the appropriate amount of damages, attorneys' fees and costs to be awarded to plaintiff. On February 14, 2011, Judge Tomlinson issued a Report and Recommendation recommending that individual liability should not be imposed against defendant Noe G. Valle, and that damages and costs be awarded in the amount of $20,350. (Docket No. 13.) Plaintiff did not request attorney fees. (Aff. of Paul J. Hooten, docket no. 12, ¶ 34.)

On February 16, 2011, plaintiff filed proof of service of a copy of the Report and Recommendation upon the defendants. More than fourteen (14) days have elapsed since service of the Report and Recommendation, and neither party has filed any objections to it.

Pursuant to 28 U.S.C. § 636(b) and Fed.R.Civ.P. 72, this Court has reviewed the Report and Recommendation for clear error, and finding none, now concurs in both its reasoning and its result. Accordingly, this Court adopts the February 14, 2011 Report and Recommendation of Judge Tomlinson as if set forth herein. The Court therefore directs that judgment be entered as follows: plaintiff recovers from defendant Pizzeria y Pupuseria Santa Rosita, Inc., d/b/a, Santa Rosita Restaurante y Pupuseria the amount of $20,350.00. The Court further directs the Clerk of Court to vacate the entry of default judgment against defendant Noe G. Valle. Upon entry of judgment, the Clerk of Court shall close this case.

SO ORDERED.

REPORT AND RECOMMENDATION

A. KATHLEEN TOMLINSON, United States Magistrate Judge:I. Preliminary Statement

Plaintiff Circuito Cerrado, Inc. (“Plaintiff” or “CCI”) commenced this action against Defendants Pizzeria Y Pupuseria Santa Rosita, Inc., d/b/a Santa Rosita Restaurante Y Pupuseria (“Pizzeria Y”) and Noe G. Valle, (collectively, “Defendants”) for violations of the Federal Communications Act of 1934 (“FCA”), codified at 47 U.S.C. §§ 605 and 553. See DE 1. After Defendants failed to answer or otherwise move with respect to the Complaint, Defendants' default was noted by the Clerk and the Plaintiff moved for default judgment. See DE 5, 7. District Judge Hurley entered a default judgment against the Defendants and referred this matter to me for an inquest to determine and recommend what damages, if any, are appropriate in this matter, including any attorneys' fees.

The Plaintiff seeks an award of statutory and enhanced damages equaling $20,000, plus 9% pre-judgment interest and costs, for a total of $22,120. See DE 11–12. Based on the information submitted by Plaintiff and for the reasons set forth below, I respectfully recommend to Judge Hurley that damages be awarded against only Defendant Pizzeria Y in the amount of $ 20,350.

II. Background

The Plaintiff entered into a closed-circuit television license agreement whereby it received the exclusive right to exhibit the closed-circuit telecast of the June 10, 2009 CONCACAF World Cup Qualifier Tournament which included the Honduras v. El Salvador match (subsequently referred to as the “Event”) at various commercial locations throughout New York. See Compl. ¶ 8. The Event could only be exhibited in an establishment that was contractually authorized to do so. Id. ¶ 10. Therefore, the transmission of the Event was electronically coded or “scrambled” and could only be seen clearly after it was decoded with electronic decoding equipment. Id. ¶ 12.

Pursuant to the license agreement, Plaintiff marketed and distributed the closed-circuit rights by contracting with various establishments for a fee. Id. ¶ 11. Those establishments which contracted with Plaintiff were provided with the decoding equipment and satellite coordinates necessary to receive the signal of the Event. Id. ¶ 14. Defendants, however, did not contract with Plaintiff to obtain the rights to broadcast the Event. Id. ¶ 13. Nevertheless, on June 10, 2009, Defendants intercepted and/or received the signal of the Event and then transmitted, divulged and published the same to its patrons. Id. ¶ 15.

III. DiscussionA. Default

A default constitutes an admission of all well-pleaded factual allegations in the complaint and the allegations as they pertain to liability are deemed true. Joe Hand Promotions, Inc. v. El Norteno Rest. Corp., No. 06–CV–1878, 2007 WL 2891016, at *2 (E.D.N.Y. Sept. 28, 2007) (citing Greyhound Exhibitgroup, Inc. v. E.L. U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir.1992), cert. denied, 506 U.S. 1080, 113 S.Ct. 1049, 122 L.Ed.2d 357 (1993)); BMG Music v. Pena, No. 05–CV–2310, 2007 WL 2089367, at *2 (E.D.N.Y. July 19, 2007). The Complaint alleges violations of 47 U.S.C. §§ 553(a)(1) and 605(a). See Compl. ¶¶ 21–35. Although these sections overlap,

section 605 applies to the theft of a radio communication whether or not the radio communication is thereafter sent out over a cable network, [while] section 553 applies to communication thefts from a cable network, whether or not the communication originated as a radio communication.

J & J Sports Prods. v. 291 Bar & Lounge, 648 F.Supp.2d 469, 471 (E.D.N.Y. Aug. 19, 2009). However, in light of the Second Circuit's determination that a satellite signal is considered a radio communication under Title 47 ( see Int'l Cablevision, Inc. v. Sykes, 997 F.2d 998, 1008 (2d Cir.1993)), “both prohibit the unauthorized reception of any cable television programming services which originate as satellite-delivered radio communications.” Joe Hand Promotions, Inc. v. Fofana, No. 06 CV 2099, 2007 WL 2298372, at *4 (citing Cmty. Television Sys., Inc. v. Caruso, 284 F.3d 430, 434–35 (2d Cir.2002)); see also J & J Sports Prods. v. Welch, No. 10–CV0159, 2010 WL 4683744, at *2 (E.D.N.Y. Nov. 10, 2010) (“Section 553 and 605 apply, respectively, to cable and radio communications, but both provisions apply where a cable-borne transmission originates as a radio transmission.”).

Since Defendants' default is deemed an admission of all the well-pleaded allegations in Plaintiff's complaint, Defendants have thus admitted to misappropriating Plaintiff's licensed exhibition of the Event, the transmission of which was electronically coded or “scrambled,” when they intercepted, received and transmitted the Event without authorization. Compl. ¶¶ 12–19. Although the Complaint does not clearly state that the Event originated as a satellite signal, Plaintiff mentions that in order for the signal to be received, it had to be decoded with electronic decoding equipment along with satellite coordinates. Id. ¶¶ 12–14. This reference provides a sufficient basis to establish that the Event originated with a radio transmission and that Defendants' unauthorized interception violated Sections 553 and 605. See 291 Bar & Lounge, 648 F.Supp.2d at 472–73.

However, a more difficult question is whether individual liability should be imposed against Defendant Noe G. Valle, whose only mention in the entire Complaint is the allegation that he is the owner of Pizzeria Y. Compl. ¶ 6. Individual liability under the Federal Communications Act requires that the individual authorize the underlying violation. See 291 Bar & Lounge, 648 F.Supp.2d at 473; Welch, 2010 WL 4683744, at *6. “Put differently, the complaint must establish that the individual had a ‘right and ability to supervise’ the violations, as well as an obvious and direct financial interest in the misconduct.” 291 Bar & Lounge, 648 F.Supp.2d at 473 (quoting Softel, Inc. v. Dragon Medical and Scientific Commc'ns, Inc., 118 F.3d 955, 971 (2d Cir.1997)).

Here, the Plaintiff not only fails to allege that Defendant Valle was present on the night of the violation, but it also leaves out the necessary allegation that Valle authorized or supervised the violation. Courts which have more recently addressed this issue of a lack of basic pleading have sided against individual liability. See 291 Bar & Lounge, 648 F.Supp.2d at 473 (finding that “plaintiff has made no allegation that [individual defendant] was present for the violation, that he authorized or controlled it, or that he reaped commercial profit from it.”); J & J Sports Prods v. Daley, No. CV 06–0238, 2007 WL 7135707, at *4 (E.D.N.Y. Feb. 15, 2007) (“[T]here is nothing other than speculation to support the conclusion that [individual defendant] played any part in the violations of the FCA committed by [the defendant establishment], and even less to support the conclusion that any role he did play would warrant imposing individual liability.”) Conversely, the courts which have found individual liability are grounded in somewhat stronger factual contentions than the case at bar.¹ See Welch, 2010 WL 4683744, at *6 (finding individual liability where complaint alleges that defendant “was the individual with supervisory capacity and control over activities occurring within the Establishment on [the date of violation];” J & J Sports Prods. v. Benson, 2007 WL 951872, at *7 (E.D.N.Y. Mar. 27, 2007) (same)). Accordingly, since Plaintiff's only allegation against Mr. Valle is mere ownership of the violating entity, I am respectfully recommending to Judge Hurley that individual liability should not be imposed against Defendant Noe G. Valle. As such, the Defendants should not be held jointly and severally liable.

B. Damages

A default judgment entered on the well-pleaded allegations in the complaint establishes a defendant's liability. See Garden City Boxing Club, Inc. v. Morales, No. 05–CV–0064, 2005 WL 2476264, at *3 (E.D.N.Y. Oct. 7, 2005) (citing Bambu...