Kingvision Pay-Per-View Ltd. v. Zalazar

• Decision Date: 13 August 2009
• Docket Number: No. 06 Civ. 4441 (RJS).,06 Civ. 4441 (RJS).
• Citation: 653 F.Supp.2d 335
• Parties: KINGVISION PAY-PER-VIEW LTD. as broadcast licensee of the May 14, 2005 Wright/Trinidad program, Plaintiff, v. Francisco ZALAZAR, individually and d/b/a Fran Barber Shop, and Fran Barber Shop, Defendants.
• Court: U.S. District Court — Southern District of New York

653 F.Supp.2d 335

KINGVISION PAY-PER-VIEW LTD. as broadcast licensee of the May 14, 2005 Wright/Trinidad program, Plaintiff, v. Francisco ZALAZAR, individually and d/b/a Fran Barber Shop, and Fran Barber Shop, Defendants.

No. 06 Civ. 4441 (RJS).

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

August 13, 2009.

COPYRIGHT MATERIAL OMITTED

Julie Cohen Lonstein, Lonstein Law Office P.C., Ellenville, NY, for Plaintiff.

ORDER

RICHARD J. SULLIVAN, District Judge:

By Order dated January 7, 2009, the Court granted Plaintiffs application for a default judgment in this action. The Court thereafter referred the action to the Honorable Michael H. Dolinger, Magistrate Judge, for a determination of damages. On June 11, 2009, Magistrate Judge Dolinger issued his Report and Recommendation recommending an award of $6,025.00 in statutory damages and $1,337.50 in attorney's fees and costs. No objections to the Report and Recommendation have been filed.

Where no timely objection to a report and recommendation has been made, the "court need only satisfy itself that there is no clear error on the face of the record." Wilds v. United Parcel Serv., 262 F. Supp.2d 163, 169 (S.D.N.Y.2003) (internal quotations and citations omitted). The Court has reviewed Magistrate Judge Dolinger's thorough Report and Recommendation, and discerns no clear error therein. Accordingly, the June 11, 2009 Report and Recommendation is adopted in its entirety.

SO ORDERED.

REPORT & RECOMMENDATION

MICHAEL H. DOLINGER, United States Magistrate Judge.

TO THE HONORABLE RICHARD J. SULLIVAN, U.S.D.J.:

Plaintiff Kingvision Pay-Per-View, Ltd. ("Kingvision") seeks damages for the alleged unauthorized public exhibition of a championship boxing telecast in 2005 by defendants Francisco Zalazar, individually and doing business as Fran Barber Shop, and by Fran Barber Shop, in violation of the Communications Act of 1934, as amended, 47 U.S.C. §§ 553 and 605. Defendants failed to answer the complaint, and a default was entered against them. Plaintiff now seeks statutory damages and attorney's fees and costs.

For the reasons that follow, we recommend that judgment be entered awarding plaintiff $6,025.00 in statutory damages and $1,337.50 in attorney's fees and costs.

PROCEDURAL BACKGROUND

Plaintiff filed its complaint on June 13, 2006, alleging that defendants had engaged in an unauthorized exhibition of the Wright/Trinidad boxing telecast to nine people on May 14, 2005. (Aff. of Donna K. Westrich, sworn to Oct. 27, 2006 ("Westrich Aff.") ¶ 7). Defendants failed to respond to the complaint after being served with process on July 6, 2006, and the District Court granted plaintiff's motion for entry of a default on January 7, 2009. (See Order dated Jan. 7, 2009). The matter was then referred to this court to conduct an inquest on damages. Plaintiff has filed affidavits in support of the relief it seeks. Defendants, although offered the opportunity to respond, have chosen not to do so.

EVIDENTIARY RECORD

Defendants' default "is deemed to constitute a concession to all well-pleaded allegations of liability," but it is "not considered an admission of damages." Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir.1992); see also Cotton v. Slone, 4 F.3d 176, 181 (2d Cir.1993) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir.1981)). To determine the amount of damages, we rely on the factual allegations of the complaint as well as the additional affidavits filed by the plaintiff containing pertinent factual information. See, e.g., Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 54 (2d Cir. 1993); Action S.A. v. Marc Rich & Co., 951 F.2d 504, 508 (2d Cir.1991) (quoting Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir.1989)).

By contract, Kingvision was granted the exclusive right to distribute the Wright/Trinidad Program ("the Program"), including all undercard bouts¹ and the entire television broadcast, scheduled for May 14, 2005, via closed circuit television and encrypted satellite signal. (Westrich Aff. ¶ 3). Kingvision subsequently entered into agreements with various commercial entities in the State of New York, allowing them to publicly exhibit the Program to their patrons by paying a fee directly to Kingvision. (Compl. ¶ 16; Westrich Aff. ¶ 3), Kingvision paid significant sums of money for the exclusive distribution of the Program. (Compl. ¶ 17).

Kingvision distributed the Program by closed circuit television and encrypted satellite signal only to those who paid the requisite fees. (Compl. ¶ 15; see Westrich Aff. Ex. B). Establishments that entered into an agreement with Kingvision to receive and exhibit the Program paid an authorization fee of $200.00. (Westrich Aff. Ex. B). Additionally, they were charged a fee of $12.50 per seat based on the fire code occupancy of the venue to allow for establishments of varying sizes. (Id.) Kingvision typically suffers a significant drop in sales when a program is exhibited by entities unauthorized to do so. (Westrich Aff. ¶ 10).

Defendants were not authorized to receive or exhibit the Program. (Compl. ¶ 18). Without having paid a fee or signed a contract, defendants unlawfully used an illegal satellite receiver or cable converter box to intercept Kingvision's Program for the purpose of receiving it and exhibiting it to patrons within the barber shop. (Id. at ¶¶ 18, 19).

Plaintiff discovered defendants' violation through a hired independent auditor, Lee Packtor, who visited Fran Barber Shop at the time of the Program's broadcast on May 14, 2005 and witnessed its exhibition to patrons. (See Westrich Aff. ¶ 7, Ex. D). He paid no cover charge and observed one television set exhibiting a portion of the Program to approximately nine people in an establishment with an estimated capacity of 25. (Id.).

On three other occasions, Kingvision hired independent auditors who observed unauthorized exhibitions of Kingvision programs at Fran Barber Shop. (See Aff. of Julie Cohen Lonstein, sworn to Nov. 30, 2006 ("Lonstein Aff.") ¶¶ 5, 6, 7). These violations occurred on September 29, 2001; November 27, 2004; and July 26, 2005.² (Id.). There is no evidence that Kingvision pursued defendants for these violations.

ANALYSIS

I. Damages Under the Communications Act

Plaintiff brings claims under both 47 U.S.C. §§ 605(a) and 553(a)(1). The Second Circuit has held that both statutes apply to the unauthorized interception of signals from a cable television system. Section 605(a) prohibits a broad range of unauthorized interception or receipt of communications (such as "wire or radio" signals), whereas section 553 concerns only the interception of cable transmissions. See Int'l Cablevision, Inc. v. Sykes, 75 F.3d 123, 133 (2d Cir.1996). Each of these provisions authorizes the court to grant an award to an aggrieved party. This award may be actual damages plus the profits accruing to the defendant by virtue of his violation or, alternatively, an award of statutory damages. 47 U.S.C. §§ 553(c)(3)(A), 605(e)(3)(C)(i).

A. General Criteria for Statutory Damages

Although a defendant may be liable under both section 553 and section 605, the plaintiff may recover only once. See, e.g., Kingvision Pay-Per-View, Ltd. v. New Paradise Rest., 2000 WL 378053, at *2 (S.D.N.Y. Apr. 11, 2000); Time Warner Cable of New York City v. Barnes, 13 F.Supp.2d 543, 548 (S.D.N.Y.1998); Time Warner Cable of New York City v. Taco Rapido Rest., 988 F.Supp. 107, 110 (E.D.N.Y.1997) ("[W]here a defendant is found to have violated both statutes, the court should award damages pursuant to [section] 605."); Time Warner Cable of New York City v. Olmo, 977 F.Supp. 585, 589 (E.D.N.Y.1997) (citing Sykes, 75 F.3d at 131-33). Potential recoveries under these two provisions differ to a degree, with section 605 offering the more generous potential award.

Section 553 gives the court discretion to award between $250.00 and $10,000.00 in statutory damages for "all violations," 47 U.S.C. § 553(c)(3)(A)(ii), but with the proviso that the maximum award may be increased by up to $50,000.00 for violations "committed willfully for the purpose of commercial advantage or private financial gain ..." 47 U.S.C. § 553(c)(3)(B). Section 553 also authorizes the court to reduce the award of statutory damages to a minimum of $100.00 if it "finds that the violator was not aware and had no reason to believe that his acts constituted a violation of this section." 47 U.S.C. § 553(c)(3)(C).

The terms of section 605(e)(3) allow for statutory damages ranging from $1,000.00 to $10,000.00 for "each violation." 47 U.S.C. § 605(e)(3)(C)(i)(II). The maximum fee increases to $100,000.00 per violation if the violation was "committed willfully and for the purposes of direct or indirect commercial advantage or private financial gain." 47 U.S.C. § 605(e)(3)(C)(ii). Section 605 also gives the courts discretion to reduce the statutory award against an innocent violator, with a prescribed $250.00 minimum for such unintended violations. 47 U.S.C. § 605(e)(3)(C)(iii).

Plaintiff alleges that defendants willfully violated both sections 553 and 605, but elects to recover statutory damages only under section 605(e)(3)(C)(i)(II). (Westrich Aff. ¶ 8).

B. The Calculation of Damages

The court has broad discretion in assessing damages. See, e.g., Taco Rapido Rest., 988 F.Supp. at 111 (citing, inter alia, 47 U.S.C. § 605(e)(3)(C)(i)(II)). When determining statutory damages under section 605, courts generally choose between two methods of calculation—a per-customer damage calculation or a flat-sum award. See Kingvision Pay-Per-View, Ltd. v. Recio, 2003 WL 21383826, at *4 (S.D.N.Y. June 11, 2003).

The per-customer approach employs a formula that multiplies a dollar amount per customer by the number of patrons present during the unauthorized exhibition. See, e.g., New Contenders, Inc. v. Diaz Seafood Corp., 1997 WL 538827, at *2 (S.D.N.Y. Sept. 2, 1997) (awarding $300.00 per...