Joe Hand Promotions, Inc. v. Necessary Studios, Inc.

• Decision Date: 05 December 2022
• Docket Number: 21-CV-5551 (LDH) (RER)
• Parties: JOE HAND PROMOTIONS, INC. v. NECESSARY STUDIOS, INC. D/B/A NECESSARY STUDIOS AND LAVARRO JONES LDH RER
• Court: U.S. District Court — Eastern District of New York

JOE HAND PROMOTIONS, INC.
v.
NECESSARY STUDIOS, INC. D/B/A NECESSARY STUDIOS AND LAVARRO JONES LDH RER

No. 21-CV-5551 (LDH) (RER)

United States District Court, E.D. New York

December 5, 2022

REPORT & RECOMMENDATION

RAMON E. REYES, JR., United States Magistrate Judge

To The Honorable LaShann DeArcy Hall United States District Judge

Joe Hand Promotions, Inc. (“Joe Hand” or “Plaintiff”) brought this action against Necessary Studios, Inc. d/b/a Necessary Studios (“Necessary Studios”) and LaVarro Jones (“Jones”) (collectively, “Defendants”) for pirating Plaintiff's satellite and cable transmission in violation of the Federal Communications Act of 1934, 47 U.S.C. §§ 553, 605 (ECF No. 1 (“Compl.”)). Following Defendants' failure to answer or appear, the Clerk of the Court entered notations of default. (ECF Nos. 6-7). Plaintiff subsequently moved for default judgment on June 21, 2022. (ECF No. 8). Your Honor referred the Motion to me for a Report and Recommendation the following day. (Order dated 06/22/2022).

After carefully reviewing the record, for the reasons set forth herein, I respectfully recommend that Plaintiffs' Motion for Default Judgment be denied, and that the action be dismissed for failure to timely serve Defendants under Federal Rule of Civil Procedure 4(m).

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BACKGROUND

Joe Hand is a company that licenses and distributes broadcast sporting events, including certain Ultimate Fighting Championship mixed martial arts bouts, to commercial establishments such as bars, restaurants, and lounges. (Compl. ¶¶ 1, 7). As relevant here, Joe Hand “held the exclusive commercial licensing rights to the broadcast of Ultimate Fighting Championship® 229: Khabib Nurmagomedov vs. Conor McGregor, including all undercard bouts and commentary, telecast nationwide on October 6, 2018 (the ‘Program').” (Compl. ¶ 1). In exercising those exclusive rights, Joe Hand entered into agreements to allow various commercial establishments in New York to exhibit the Program to patrons in exchange for a fee. (Compl. ¶ 9). Joe Hand alleges that it spent “substantial monies to market, advertise, promote, administer and transmit the Program,” which was originally broadcast “via satellite uplink” and was “re-transmitted interstate to cable systems and satellite television companies via satellite signal.” (Compl. ¶¶ 8-9).

Defendant Jones is the owner and principal of Necessary Studios, a business that owns and operates an establishment of the same name at 25-19 Borden Avenue, #204, Long Island City, NY 11101. (Compl. ¶¶ 2-3). According to Joe Hand, neither Jones nor Necessary Studios contracted with or paid a fee to Joe Hand in order to receive or exhibit the Program; however, on the night of the bout, Defendants obtained unauthorized access to the Program via satellite or cable transmission and exhibited the Program to patrons at Necessary Studios. (Compl. ¶¶ 10-12).

Three years after the fight, on October 6, 2021, Joe Hand brought this action against Defendants alleging claims of satellite piracy under 47 U.S.C. § 605, or in the alternative, cable piracy under 47 U.S.C. § 553. (Compl. ¶¶ 16-17). Plaintiff served the Summons and Complaint on both Defendants 114 days later on January 28, 2022. (ECF Nos. 5, 5-1). After the Defendants failed to appear or otherwise respond, Plaintiff requested that the Clerk of the Court enter default on March 3, 2022 (ECF No. 6), which was subsequently entered on March 7, 2022. (ECF No. 7).

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Following a period of inactivity, the Court ordered Plaintiff to move for default judgment on or before June 21, 2022. (Order dated 06/07/2022). Plaintiff filed the instant Motion for Default Judgment on that date (ECF No. 8), and Your Honor referred the Motion to me for a Report and Recommendation. (Order dated 06/22/2022).

On October 24, 2022, this Court determined that service upon both Defendants was untimely, and ordered Plaintiff to show cause in writing why a report should not be issued recommending that the Motion for Default Judgment be denied and the action be dismissed for untimely and insufficient service of process. (ECF No. 9).^[1]

On November 4, 2022, Plaintiff filed a supplemental affidavit of service indicating that Jones was served via “nail and mail” at his place of business on December 13, 2021, after prior attempts to serve him at that address. (ECF No. 10). Plaintiff also filed a response to the Court's Order to Show Cause, arguing that the supplemental affidavit of service proves that Jones was served properly and timely (ECF No. 11 (“OTSC Resp.”) ¶¶ 4, 7), indicating that the original affidavit of service as to Jones was provided due to a filing error (id. ¶ 7), acknowledging that Necessary Studios was untimely served due to a process server's mistake (id. ¶¶ 5-6, 8) and requesting a retroactive extension of time to serve Necessary Studios, deeming its supplemental attempt at service proper and timely (id. ¶¶ 8-1[2]).

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LEGAL STANDARDS

I. Default Judgment

Rule 55 establishes a two-step process for a plaintiff to obtain a default judgment. First, “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.” Fed R. Civ. P. 55(a). A plaintiff may then move for a default judgment against the defaulting defendant. Fed.R.Civ.P. 55(b)(2). “A default judgment is ordinarily justified where a defendant fails to respond to the complaint.” J & J Sports Prods., Inc. v. Ahuachapan Corp., 422 F.Supp.3d 652, 662 (E.D.N.Y. 2019) (quoting SEC v. Anticevic, No. 05-CV-6991 (KMW), 2009 WL 4250508, at *2 (S.D.N.Y. Nov. 30, 2009)).

“In determining whether to enter a default judgment, courts have cautioned that a default judgment is an extreme remedy that should only be granted as a last resort.” La Barbera v. Fed. Metal & Glass Corp., 666 F.Supp.2d 341, 347 (E.D.N.Y. 2009). Accordingly, “before a court grants a motion for default judgment, it may first assure itself that it has personal jurisdiction over the defendant.” Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading Corp., 619 F.3d 207, 213 (2d Cir. 2010). And “[b]efore a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied.” Omni Capital Int'l Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987); see also G&G Closed Cir. Events, LLC v. Narine, No. 20-CV-4271 (MKB) (RML), 2021 WL 7906548, at *2 (E.D.N.Y. Dec. 13, 2021) (citations omitted) (“Before entering a default judgment, the court must consider the adequacy of the plaintiff's service of process on the defendant”), adopted by 2022 WL 950449 (Mar. 30, 2022).

Indeed, “in the context of a motion for a default judgment, the Court's ‘responsibility to ensure that a proper basis for relief exists . . . takes on added weight when analyzing service of process, which implicates due process considerations.'”

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Romero v. Dazzling Events Inc., No. 19-CV-5 133 (AMD) (LB), 2020 WL 13577336, at *8 (E.D.N.Y. Dec. 30, 2020) (quoting Joe Hand Promotions, Inc. v. Dilone, No. 19-CV-871 (NGG) (RML), 2020 WL 1242757, at *2 (E.D.N.Y. Mar. 16, 2020)), adopted by 2021 WL 242188 (Jan. 25, 2021). Accordingly, “[i]neffective service-of-process is a ground to deny a motion for default judgment.” Happy Homes, LLC v. Jenerette-Snead, No. 15-CV-1788 (MKB) (RML), 2016 WL 6599826, at *3 n.10 (E.D.N.Y. Nov. 7, 2016).

II. Service of Process

The Federal Rules of Civil Procedure authorize service by personal delivery to the defendant, by leaving a copy of the summons and complaint with a person of suitable age or discretion who resides at an individual defendant's dwelling or usual place of abode, or by serving the defendant pursuant to the laws of the state in which the district court is located or the laws of the state in which service is made-in this case, New York. See Fed.R.Civ.P. 4(e); N.Y. C.P.L.R. § 308 (governing service on an individual); see also Fed.R.Civ.P. 4(h)(1)(a) (permitting same methods of service on a corporation); N.Y. C.P.L.R. §§ 306-307, 311 (governing service on a corporation).

As relevant here, New York law permits service on an individual by personal delivery, N.Y. C.P.L.R. § 308(1), by delivery “to a person of suitable age and discretion at the actual place of business, dwelling place or usual place of abode of the person to be served and by either mailing the summons to . . . his or her last known residence or . . . his or her actual place of business,” N.Y. C.P.L.R. § 308(2), or “by affixing the summons to the door of either the actual place of business, dwelling place or usual place of abode within the state of the person to be served and by either mailing the summons to . . . his or her last known residence or by mailing the summons by first class mail to . . . his or her place of business[.]'” N.Y. C.P.L.R. § 308(4). This last method of “nail and mail” service is “available only as a last resort: if in-person service ‘cannot be made with due diligence.'” Santacruz v. Blok Chocolatier LLC, No. 19-CV-544 (WFK) (SJB), 2019 WL 13160047, at *2 (E.D.N.Y. July 25, 2019)

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(quoting N.Y. C.P.L.R. § 308(4)), on reconsideration in part, 2019 WL 13160044...