Sky Cable, LLC v. DIRECTV, Inc.

• Decision Date: 10 January 2022
• Docket Number: No. 16-1946, No. 16-1943,No. 16-1920,16-1920
• Parties: SKY CABLE, LLC; Robert Saylor, Plaintiffs, and Massanutten Resort, LC ; Great Eastern Resort Corporation; Great Eastern Resort Management, Incorporated; Michael Shifflett, a/k/a Mike Shifflett; Kimberli Coley, a/k/a Kimberly Coly; Mountainside Villas Owners Association, Inc.; Woodstone Time-Share Owners Association ; Shenandoah Villas Owners Association ; Summit at Massanutten Owners Association; Regal Vistas at Massanutten Owners Association ; Eagle Trace Owners Association, Defendants, and Randy Coley, a/k/a Randolph Powhatan Cooley, a/k/a Randy Coly, d/b/a East Coast Sales, d/b/a East Coast Cable, d/b/a Resort Cable, d/b/a Its Thundertime, LLC, d/b/a East Coast Sales, LLC, d/b/a South Raleigh Air, LLC, Defendant - Appellant, v. DIRECTV, INC., Defendant - Appellee. Sky Cable, LLC; Robert Saylor, Plaintiffs, and Massanutten Resort, LC ; Great Eastern Resort Corporation; Great Eastern Resort Management, Incorporated; Michael Shifflett, a/k/a Mike Shifflett; Kimberli Coley, a/k/a Kimberly Coly; Mountainside Villas Owners Association, Inc.; Woodstone Time-Share Owners Association ; Shenandoah Villas Owners Association ; Summit at Massanutten Owners Association; Regal Vistas at Massanutten Owners Association ; Eagle Trace Owners Association, Defendants, and Randy Coley, a/k/a Randolph Powhatan Cooley, a/k/a Randy Coly, d/b/a East Coast Sales, d/b/a East Coast Cable, d/b/a Resort Cable, d/b/a Its Thundertime, LLC, d/b/a East Coast Sales, LLC, d/b/a South Raleigh Air, LLC, Defendant - Appellant, v. DIRECTV, Incorporated, Defendant - Appellee. Sky Cable, LLC; Robert Saylor, Plaintiffs, and Randy Coley, a/k/a Randolph Powhatan Cooley, a/k/a Randy Coly, d/b/a East Coast Sales, d/b/a East Coast Cable, d/b/a Resort Cable, d/b/a Its Thundertime, LLC, d/b/a East Coast Sales, LLC, d/b/a South Raleigh Air, LLC; Massanutten Resort, LC ; Great Eastern Resort Corporation; Great Eastern Resort Management, Incorporated; Michael Shifflett, a/k/a Mike Shifflett; Kimberli Coley; Mountainside Villas Owners Association, Inc.; Woodstone Time-Share Owners Association ; Shenandoah Villas Owners Association ; Summit at Massanutten Owners Association; Regal Vistas at Massanutten Owners Association ; Eagle Trace Owners Association, Defendants, and Its Thundertime, LLC, Defendant - Appellant, v. DIRECTV, Incorporated, Defendant - Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

23 F.4th 313

SKY CABLE, LLC; Robert Saylor, Plaintiffs,

and

Massanutten Resort, LC ; Great Eastern Resort Corporation; Great Eastern Resort Management, Incorporated; Michael Shifflett, a/k/a Mike Shifflett; Kimberli Coley, a/k/a Kimberly Coly; Mountainside Villas Owners Association, Inc.; Woodstone Time-Share Owners Association ; Shenandoah Villas Owners Association ; Summit at Massanutten Owners Association; Regal Vistas at Massanutten Owners Association ; Eagle Trace Owners Association, Defendants,

and

Randy Coley, a/k/a Randolph Powhatan Cooley, a/k/a Randy Coly, d/b/a East Coast Sales, d/b/a East Coast Cable, d/b/a Resort Cable, d/b/a Its Thundertime, LLC, d/b/a East Coast Sales, LLC, d/b/a South Raleigh Air, LLC, Defendant - Appellant,

v.DIRECTV, INC., Defendant - Appellee.

Sky Cable, LLC; Robert Saylor, Plaintiffs,

and

Massanutten Resort, LC ; Great Eastern Resort Corporation; Great Eastern Resort Management, Incorporated; Michael Shifflett, a/k/a Mike Shifflett; Kimberli Coley, a/k/a Kimberly Coly; Mountainside Villas Owners Association, Inc.; Woodstone Time-Share Owners Association ; Shenandoah Villas Owners Association ; Summit at Massanutten Owners Association; Regal Vistas at Massanutten Owners Association ; Eagle Trace Owners Association, Defendants,

and

Randy Coley, a/k/a Randolph Powhatan Cooley, a/k/a Randy Coly, d/b/a East Coast Sales, d/b/a East Coast Cable, d/b/a Resort Cable, d/b/a Its Thundertime, LLC, d/b/a East Coast Sales, LLC, d/b/a South Raleigh Air, LLC, Defendant - Appellant,

v.DIRECTV, Incorporated, Defendant - Appellee.

Sky Cable, LLC; Robert Saylor, Plaintiffs,

and

Randy Coley, a/k/a Randolph Powhatan Cooley, a/k/a Randy Coly, d/b/a East Coast Sales, d/b/a East Coast Cable, d/b/a Resort Cable, d/b/a Its Thundertime, LLC, d/b/a East Coast Sales, LLC, d/b/a South Raleigh Air, LLC; Massanutten Resort, LC ; Great Eastern Resort Corporation; Great Eastern Resort Management, Incorporated; Michael Shifflett, a/k/a Mike Shifflett; Kimberli Coley; Mountainside Villas Owners Association, Inc.; Woodstone Time-Share Owners Association ; Shenandoah Villas Owners Association ; Summit at Massanutten Owners Association; Regal Vistas at Massanutten Owners Association ; Eagle Trace Owners Association, Defendants,

and

Its Thundertime, LLC, Defendant - Appellant,

v.DIRECTV, Incorporated, Defendant - Appellee.

No. 16-1920

No. 16-1943

No. 16-1946

United States Court of Appeals, Fourth Circuit.

Submitted: October 29, 2021

Decided: January 10, 2022

Robert W. Shaw, SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL, & JERNIGAN, L.L.P., Raleigh, North Carolina; Patrick T. Jordan, GORDON & REES, LLP, Seattle, Washington, for Appellant Randy Coley. John W. Bryant, J.W. BRYAN LAW FIRM PLLC, Raleigh, North Carolina, for Appellant Its Thundertime, LLC. James J. O'Keeffe, IV, JOHNSON, ROSEN & O'KEEFE, LLC, Roanoke, Virginia, for Defendant Kimberli Coley. John H. Jamnback, YARMUTH WILSDON PLLC, Seattle, Washington, for Appellee.

Before GREGORY, Chief Judge, and WYNN and HARRIS, Circuit Judges.

Motion granted by published opinion. Judge Wynn wrote the opinion, in which Chief Judge Gregory and Judge Harris joined.

WYNN, Circuit Judge

The Federal Communications Act allows for recovery of attorneys’ fees for the prevailing party against the violator of the statute. Here, after the district court determined that Appellant Randy Coley d/b/a Its Thundertime, LLC violated the Federal Communications Act by misappropriating Appellee DIRECTV, Inc.’s satellite transmissions and selling them to his own customers,¹ it awarded attorneys’ fees to DIRECTV against Coley.² But to recover the judgment and attorneys’ fees in that matter, DIRECTV had to undertake extensive postjudgment litigation against Coley. DIRECTV now seeks additional attorneys’ fees and costs to be assessed against Coley for amounts expended in postjudgment enforcement litigation.

After examining the text of the Federal Communications Act and analogous case law, we grant DIRECTV's motion for an award of postjudgment attorneys’ fees.

I.

This case began with a third-party complaint against Coley and DIRECTV alleging a scheme in which Coley fraudulently procured satellite television programming from DIRECTV, and then sold and distributed that programming to unwitting customers. In response to the complaint, DIRECTV filed an amended cross-complaint against Coley for, inter alia, violations of the Federal Communications Act ("the Act"). In relevant part, the Act prohibits a person receiving, transmitting, or assisting in transmitting any interstate communication by wire or radio from publishing the contents of the communication to persons in an unauthorized manner. 47 U.S.C. § 605(a).

The district court granted summary judgment for DIRECTV against Coley and one of his companies pursuant to § 605(a). Sky Cable, LLC v. Coley , No. 5:11CV00048, 2013 WL 3517337, at *1, 19–31 (W.D. Va. July 11, 2013). Later, the district court determined that Coley was liable for 2,393 violations of § 605(a) and entered judgment against him in the amount of $2,393,000. Sky Cable, LLC v. Coley , No. 5:11CV00048, 2013 WL 5963027, at *1, 5–7 (W.D. Va. Nov. 7, 2013) (liability); Sky Cable, LLC v. Coley , No. 5:11CV00048, 2014 WL 279592, at *3, 5 (W.D. Va. Jan. 23, 2014) (judgment amount). The district court then granted $236,000 in attorneys’ fees to DIRECTV. Sky Cable, LLC v. Coley , No. 5:11CV00048, 2014 WL 4407130, at *1, 13 (W.D. Va. Sept. 8, 2014).

Thereafter, Coley engaged in a series of actions to thwart DIRECTV's recovery of the judgment and attorneys’ fees. For example, Coley failed to participate in postjudgment discovery, engaged in extensive dilatory litigation to prevent recovery against his shell companies, took contradictory stances about, among other things, his wife's involvement in his companies and her resultant liability, failed to comply with court orders, and committed fraudulent acts. After these maneuverings, the district court amended the damages award it had previously granted to DIRECTV against Coley to specify that it could be enforced against Coley and the related companies the court found were Coley's alter egos, with joint and several liability. See Sky Cable, LLC v. Coley , No. 5:11CV00048, 2016 WL 3926492, at *1, 20 (W.D. Va. July 18, 2016), aff'd in part, appeal dismissed in part sub nom. Sky Cable, LLC v. DIRECTV, Inc. , 886 F.3d 375 (4th Cir. 2018). The court later appointed a receiver to aid in the execution of the judgment.

On appeal from that judgment, we affirmed the district court's reverse corporate veil piercing, and subsequently granted DIRECTV's request for costs. See Sky Cable , 886 F.3d at 384–93 ; Order, Apr. 30, 2018, ECF No. 107.³ DIRECTV then filed a motion for recovery of attorneys’ fees related to the appeal and all postjudgment enforcement proceedings. See DIRECTV's Appl. for Attys’ Fees & Costs, Apr. 11, 2018, ECF No. 101. In response to the motion for postjudgment attorneys’ fees against all related parties, Coley filed a suggestion of bankruptcy that resulted in an automatic stay of court proceedings. See Suggestion, Apr. 30, 2018, ECF No. 108; Coley's Resp. in Opp'n to DIRECTV's Appl. for Attys’ Fees & Costs, May 8, 2018, ECF No. 114. In light of Coley's suggestion of bankruptcy, we denied without prejudice DIRECTV's motion for postjudgment attorneys’ fees against Coley and his alter egos because such an award was precluded by the bankruptcy court's automatic stay. See Order at 6, July 16, 2018, ECF No. 118 ("[T]he filing of a petition in bankruptcy operates as a stay of (1) the continuation of a judicial proceeding against the debtor that was commenced before the commencement of the bankruptcy case, or to recover a claim against the debtor that arose before the commencement of the bankruptcy case, or (3) any act to obtain possession of property of the estate." (citing 11 U.S.C. § 362(a)(1), (3) )).

Afterwards, DIRECTV sought and obtained relief from the bankruptcy court's automatic stay in order to seek recovery from Coley. See Order Granting Mot. for Relief from Automatic Stay, In re Coley , No. 18-02154-5-JNC (Bankr. E.D.N.C. July 10, 2019), ECF No. 312. DIRECTV has now renewed its motion for postjudgment attorneys’ fees. See DIRECTV's Renewed Appl. for Attys’ Fees and Costs at 7–8, Aug. 2, 2019, ECF No. 120. DIRECTV requests a total of $57,295 in fees and $1,403.03 in costs not covered by this Court's prior order. See Renewed Appl. at 18, 20.

II.

The issue on appeal is whether the Federal Communications Act permits the award of attorneys’ fees and costs for postjudgment enforcement litigation and collection. It is an issue of first impression before this Court. We start by examining the text of the Act and analogous case law before turning to the facts of this case.

A.

"[U]nder the default American rule that each party bears its own attorneys[’] fees," a "prevailing party in a suit is not entitled to recover reasonable attorneys[’] fees and costs from the losing party." Brat v. Personhuballah , 883 F.3d 475, 480, 484 (4th Cir. 2018) (citing Alyeska Pipeline Serv. Co. v. Wilderness Soc'y , 421 U.S. 240, 247, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975), which provides a history of this common-law rule). Congress, however, has altered this rule to include a statutory fee-shifting provision, providing that a court "shall direct the recovery of full costs, including awarding reasonable attorneys’ fees to an aggrieved party who prevails " under § 605(a). 47 U.S.C. § 605(e)(3)(B)(iii) (emphases added). A prevailing party "is one [that] has been awarded some relief by the court." Goldstein v. Moatz , 445 F.3d 747, 751 (4th Cir. 2006) (quoting Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Hum. Res. , 532 U.S. 598, 603, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001)). And the term "some relief" refers to relief that "create[s] the material alteration of the legal relationship of the parties necessary to permit an award of attorney[s’] fees," id. (quoting Buckhannon , 532...