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Joe Hand Promotions Inc. v. Nichols

United States District Court, S.D. West Virginia, Charleston Division

July 28, 2017

JOE HAND PROMOTIONS INC., Plaintiff,
v.
DEBORAH SERGEON NICHOLS, et al., Defendant.

          MEMORANDUM OPINION AND ORDER

          THOMAS E. JOHNSTON UNITED STATES DISTRICT JUDGE

         Before the Court is Plaintiff Joe Hand Promotions, Inc.'s Motion for Default Judgment (ECF No. 14.) For the reasons that follow, the motion is GRANTED. Damages are awarded in amounts set forth below.

         I. BACKGROUND

         Plaintiff Joe Hand Promotions, Inc. (“Joe Hand”) is a nationwide distributor of closed-circuit and pay-per-view sports and entertainment programming to commercial establishments. Joe Hand enters into sublicensing agreements with these establishments to permit the public broadcast of its programming. By contract, Joe Hand purchased rights to distribute the “Ultimate Fighting Championship 171: Lawlor v. Hendricks” broadcast scheduled for March 15, 2014, (the “Broadcast”), via closed circuit television and encrypted satellite signal. (Compl. ¶ 14, ECF No. 1 at 3.) Joe Hand entered into agreements with several West Virginia commercial establishments allowing them to distribute the Broadcast for viewing by their patrons. (Id. ¶ 15.)

         On November 20, 2014, Joe Hand filed this lawsuit alleging that Defendants Miguel's Sports Grill Inc. (“Miguel's”) and Deborah Sergeon Nichols, its principal, owner, or director, unlawfully intercepted and exhibited the Broadcast for the purpose of direct or indirect commercial advantage or private financial gain. The two-count Complaint alleges violations of 47 U.S.C. §§ 553 and 605. Defendants have failed to answer or otherwise respond to the Complaint despite being properly served. The Court entered default on July 28, 2016 and now enters default judgment.

         II. LEGAL STANDARD

         Default judgment is available “when the adversary process has been halted because of an essentially unresponsive party.” S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)). Under Federal Rule of Civil Procedure 55, which governs default judgments, “trial judges are vested with discretion, which must be liberally exercised, in entering . . . [default] judgments and in providing relief therefrom.” United States v. Moradi, 673 F.2d 725, 727 (4th Cir. 1982). The defendant's failure to respond constitutes an admission of the well-pleaded factual allegations in the complaint, except as related to damages. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001). The court must make an independent determination of damages where the amount of the plaintiff's claim is uncertain. Fed.R.Civ.P. 55(b). Reliance on affidavits, without an in-person hearing, is appropriate as long as the record supports the damages requested. Id. The Court notes that no hearing is necessary in this case.

         III. DISCUSSION

         Joe Hand has alleged violations of §§ 553 and 605. However, an injured plaintiff cannot recover damages under both § 553 and § 605, see Joe Hand Promotions, Inc. v. Coaches Sports Bar, 812 F.Supp.2d 702, 704 (E.D. N.C. Sept. 19, 2011) (citation omitted), and here Joe Hand elects to pursue damages only under § 605. The Court will consider whether Joe Hand has pleaded facts giving rise to liability under § 605 before resolving the question of damages.

         Section 605 provides that “[n]o person not being authorized by the sender shall intercept any radio communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted communication to any person . . . . ” 47 U.S.C. § 605(a). The statute continues: “Any person aggrieved by any violation of subsection (a) of this section or paragraph (4) of this subsection may bring a civil action in a United States district court.” § 605(e)(3). The “intercepted communications” referenced in the statute include satellite transmissions. See § 605(d)(6) (defining “any person aggrieved” as a person who maintains “proprietary rights in the intercepted communication by wire or radio, including wholesale or retail distributors of satellite cable programming”); see also Nat'l Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 914 (6th Cir. 2001) (concluding after discussion of the relevant legislative history that “Congress intended to bring cable and satellite communications under the protection of [the Communications] Act”).

         Joe Hand has alleged facts that, when accepted as true, support liability under § 605. Joe Hand alleges that it was granted the right to display the Broadcast via encrypted satellite signal on March 15, 2014 and that Defendants knowingly and intentionally intercepted its satellite transmission and displayed the program for its patrons to view. (Compl. ¶ 14-18.) Joe Hand provides the affidavit of its auditor, Stoney Lee Shifflett, who was present at Miguel's on March 15, 2014 and testifies that he observed Miguel's airing the Broadcast on four television screens. (Shifflett Aff. at 1, ECF No. 15-3.) Joe Hand adds that there are several illegal methods of accessing the Broadcast, though without discovery it is impossible to determine which particular method Defendants employed. Nevertheless, Joe Hand avers that its programming cannot be mistakenly, innocently, or accidentally intercepted. (Aff. of Joe Hand Jr., President, at ¶ 9, ECF No. 15-1.) Joe Hand believes that Defendants most likely “used an illegal satellite receiver, misrepresented [their] business establishment as a residence, or removed an authorized residential receiver from one location to a different commercial location” to intercept the Broadcast. (Compl. ¶ 18.)

         These allegations establish liability against Miguel's as well as Nichols individually, as she “was the individual with supervisory capacity and control over the activities occurring within the establishment on March 15, 2014” and received a financial benefit therefrom. (Id. ¶¶ 7-8); see Joe Hand Promotions, Inc. v. Phillips, No. 06 Civ. 3624(BSJ)(JCF), 2007 WL 2030285, at *3 (S.D.N.Y. July 16, 2007) (finding vicarious liability applies where the defendant “had a ‘right and ability to supervise' the violations, and that he had a strong financial interest in such activities” (citation omitted)). Accordingly, Nichols may be held jointly and severally liable along with Miguel's for the § 605 violation.

         An aggrieved plaintiff may recover between $1, 000 and $10, 000 in actual or statutory damages for each violation of § 605(a). § 605(e)(3)(C)(i)(II). The statute also provides enhanced damages of up to $100, 000 per violation for those who violate its provisions “willfully” with the purpose of obtaining a commercial advantage or private financial gain. § 605(e)(3)(C)(ii). Joe Hand requests $4500 in statutory damages and $20, 000 in enhanced damages.

         A full estimation of actual damages would be speculative in this case, though Joe Hand has provided some evidence to guide the Court's calculation of its losses. Mr. Schifflett attests that 28 patrons were present at Miguel's during the airing of the Broadcast. (Shifflett Aff. at 2.) He estimates the occupancy limit of Miguel's is 50 persons. (Id.) Joe Hand calculates rates for its sublicensing contracts based on maximum occupancy, as noted by the “rate card” attached to Joe Hand's motion. For an establishment of this size, Joe Hand would charge $900 for the right to display the Broadcast. (Rate Card, ECF No. 15-4.) Defendants had not paid the fee to air the Broadcast. Joe Hand also submits a printout from Miguel's social media page showing that Miguel advertised the broadcast of a prior ...


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