Sky Cable, LLC v. Coley

• Decision Date: 07 November 2013
• Docket Number: Civil Action No. 5:11cv00048
• Court: U.S. District Court — Western District of Virginia
• Parties: SKY CABLE, LLC, et al., Plaintiffs, v. RANDY COLEY, et al., Defendants.

SKY CABLE, LLC, et al., Plaintiffs, v. RANDY COLEY, et al., Defendants.

Civil Action No. 5:11cv00048

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF VIRGINIA HARRISONBURG DIVISION

Entered: November 7, 2013

By: Michael F. Urbanski

United States District Judge

MEMORANDUM OPINION

This matter is before the court on the motion for partial summary judgment filed by cross-claim and third party plaintiff DIRECTV, LLC ("DIRECTV") against cross-claim defendant Randy Coley and third party defendant East Coast Cablevision, LLC ("the Coley defendants") (Dkt. # 209). DIRECTV seeks an award of statutory damages on its claim for violation of the Communications Act, 47 U.S.C. § 605(a).¹ The Coley defendants oppose the entry of summary judgment awarding statutory damages, principally arguing that they have a Seventh Amendment right to jury trial on the issue.

The court agrees that, as the case is presently postured, the Coley defendants have a right to a jury trial on the issue of the amount of statutory damages to be awarded to DIRECTV within the range of $1,000 to $10,000 per violation. At the same time, the issue of the number of violations of § 605(a) is not an issue to be resolved by the trier of fact, as it is a question of law for the court. As to this issue, the court concludes that the Coley defendants are liable for 2,393 violations. While the court has determined as a matter of law the number of § 605(a) violations,a jury must determine what amount of statutory damages in the applicable range- between $1,000 and $10,000 per violation - is to be awarded DIRECTV against the Coley defendants.² As such, DIRECTV's motion for summary judgment is GRANTED IN PART and DENIED IN PART.

I.

This case arises out of the receipt and unauthorized distribution of DIRECTV satellite programming to thousands of viewers at Massanutten Resort, orchestrated by the Coley defendants. As detailed in a memorandum opinion entered on July 11, 2013, the court found that the Coley defendants violated 47 U.S.C. § 605(a), but concluded that disputed issues of material fact existed as to the extent of the actual damages claimed by DIRECTV.

The Communications Act provides that for violations of § 605(a), the aggrieved party is entitled to elect between (1) "actual damages suffered by him as a result of the violation and any profits of the violator that are attributable to the violation which are not taken into account in computing the actual damages," or (2) statutory damages in "a sum not less than $1,000 or more than $10,000" per violation. See 47 U.S.C. § 605(e)(3)(C)(i). The statute also provides with regard to statutory damages that "[i]n any case in which the court finds that the violation was committed willfully and for the purposes of direct or indirect commercial advantage or private financial gain, the court in its discretion may increase the award of damages, whether actual or statutory, by an amount of not more than $100,000 for each violation of subsection (a) of this section." See 47 U.S.C. § 605(e)(3)(C)(ii).

In an effort to skirt all factual issues precluding an award of summary judgment, DIRECTV limits its damages claim in three respects. First, DIRECTV eschews any claim toactual damages, electing an award of statutory damages of between $1,000 and $10,000 per violation. Second, following the court's earlier summary judgment ruling, DIRECTV eliminates a factual issue by limiting its damages claim to the two year period prior to the date DIRECTV filed suit. Third, DIRECTV declines to pursue enhanced statutory damages for a willful violation under 47 U.S.C. § 605(e)(3)(C)(ii), thus eliminating any potential factual issue as to willfulness. DIRECTV claims these limitations leave no factual issue to be resolved as to damages.

The Coley defendants disagree, advancing three arguments in support of their position that summary judgment is not appropriate. First, they argue that they are entitled to have a jury determine the amount of statutory damages to be awarded. Second, they argue that they are potentially liable for only one § 605(a) violation. Third, they argue that if the court concludes that they are liable for multiple violations, the damages awarded should reflect DIRECTV's actual losses and be at the low end of the statutory range. The first and third arguments raised by the Coley defendants concern the issue of the range of statutory damages to be awarded for each violation; the second argument concerns the number of violations. The court will first address the issues surrounding the statutory range of damages per violation before turning to the issue of the number of violations.

II.

The Coley defendants first argue that summary judgment is inappropriate because they have a constitutional right to a jury trial on DIRECTV's claim for statutory damages, relying principally the United States Supreme Court's decision in Feltner v. Columbia Pictures Television. Inc., 523 U.S. 340 (1998). In Feltner, the Court held that a Copyright Act litigant has a right to a jury trial under the Seventh Amendment, "which includes a right to a jurydetermination of the amount of statutory damages." Id. at 342. Columbia Pictures sued Feltner under the Copyright Act for unauthorized broadcasting of several of its copyrighted television shows. The district court declined Feltner's request for a jury trial on the issue of statutory damages, instead conducting a bench trial. The Supreme Court's opinion summarized the proceedings at the district court as follows:

After two days of trial, the trial judge held that each episode of each series constituted a separate work and that the airing of the same episode by different stations controlled by Feltner constituted separate violations; accordingly the trial judge determined that there had been a total of 440 acts of infringement. The trial judge further found that Feltner's infringement was willful and fixed statutory damages at $20,000 per act of infringement. Applying that amount to the number of acts of infringement, the trial judge determined that Columbia was entitled to $8,800,000 in statutory damages, plus costs and attorney's fees.

523 U.S. at 344. The Ninth Circuit Court of Appeals affirmed the district court's rejection of Feltner's request for a jury determination of statutory damages. The Supreme Court reversed, concluding that the Seventh Amendment entitled Feltner "to a jury determination of the amount of statutory damages."³

In so holding, the Court first considered whether the Copyright Act provided for a right to jury trial on the issue of statutory damages, concluding that it did not. In that regard, it is worth noting that the statutory damages provision in the Communications Act, at issue in the instant case, closely tracks the language of the Copyright Act. Both statutes provide that statutory damages may be awarded within a given range "as the court considers just." 17 U.S.C. § 504(c)(1) and 47 U.S.C. § 605(e)(3)(C)(i)(II). The Feltner opinion noted that "[t]he word 'court' in this context appears to mean judge, not jury," 523 U.S. at 346, and concluded, "[w]e thusdiscern no statutory right to a jury trial when a copyright owner elects to recover statutory damages." Id. at 347.

The Court next turned to the constitutional issue. The Seventh Amendment provides that "[i]n Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved . . . ." U.S. Const, amend. VII. The right to jury trial "is not limited to actions that actually existed at common law, but extends to actions analogous thereto." J&J Sports Productions. Inc., v. Orellana, No. 08-05468, 2010 WL 1576447, at *2 (N.D. Cal. Apr. 19, 2010) (quoting Spinelli v. Gaughan, 12 F.3d 853, 855 (9th Cir. 1993) (citing Tull v. United States, 481 U.S. 412, 417 (1987))). The Feltner Court thus assessed whether the copyright cause of action was "analogous to common-law causes of action ordinarily decided in English law courts in the late 18th century, as opposed to those customarily heard by courts of equity or admiralty." 523 U.S. at 348 (quoting Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42 (1989) (citing Curtis v. Loether, 415 U.S. 189, 193 (1974))). The Court found that there was "clear and direct historical evidence that juries, both as a general matter and in copyright cases, set the amount of damages awarded a successful plaintiff," 523 U.S. at 355, and concluded as a result that "the Seventh Amendment provides a right to a jury trial on all issues pertinent to an award of statutory damages under § 504(c) of the Copyright Act, including the amount itself." Id.⁴ It is noteworthy that the Fourth Circuit Court of Appeals earlier reached the same conclusion in an action seeking statutory damages under the Copyright Act. Gnossos Music v. Mitken, Inc., 653 F.2d 117, 121 (4th Cir. 1981) ("In our view, the application of the seventh amendment to the facts of this case mandates a trial by jury.").

Thus, "Feltner holds that a claim for statutory damages under § 504(c) is a suit at law to which the seventh amendment applies. This does not mean, however, that a jury must resolve every dispute. When there are no disputes of material fact, the court may enter summary judgment without transgressing the Constitution." BMG Music v. Gonzalez, 430 F.3d 888, 892 (7th Cir. 2005). As the Seventh Circuit explained in BMG Music:

We read Feltner as establishing no more (and no less) than that cases under § 504(c) are normal civil actions subject to the normal allocation of functions between judge and jury. When there is a material dispute of fact to be resolved or discretion to be exercised in selecting a financial award, then either side is entitled to a jury; if there is no material dispute and a rule of law eliminates discretion in selecting the remedy, then summary judgment is permissible.

430 F.3d at 892-93 (citing Segrets, Inc. v. Gillman Knitwear Co., 207 F.3d 56, 65 n.7 (1st Cir. 2000))...