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JOE HAND PROMOTIONS, INC. v. RENNARD ST. ENTERPRIS

January 28, 1997

JOE HAND PROMOTIONS, INC.
v.
RENNARD STREET ENTERPRISES, INC., et al.



The opinion of the court was delivered by: HUTTON

 HUTTON, J.

 January 28, 1997

 Presently before this Court is the Motion of Defendants Lennon's Bar, Inc., James Lennon, and Gloria Lennon to Dismiss the Plaintiff's Complaint for Failure to State a Claim Upon Which Relief May be Granted.

 I. BACKGROUND

 The plaintiff, Joe Hand Promotions, Inc., was granted the right to distribute a championship prizefight boxing match broadcast nationwide on June 17, 1995, via closed circuit television. *fn1" The plaintiff entered into agreements with various entities in Pennsylvania to publicly exhibit the boxing match to their patrons.

 The plaintiff claims that on June 17, 1995, eighteen defendants *fn2" exhibited the boxing match at the time of its transmission even though they had not paid the required subscription fee. Therefore, on May 9, 1996, the plaintiff filed suit against these defendants in this Court, alleging that the defendants violated 47 U.S.C. § 605 by exhibiting the prizefight, without authorization. In addition, the plaintiff alleges claims of conversion and interference with prospective economic advantage.

 On July 19, 1996, three of the defendants, Lennon's Bar, Inc., James Lennon, and Gloria Lennon (collectively "the defendants"), responded by filing the instant motion to dismiss. In their motion, the defendants argue that the plaintiff's complaint must be dismissed because it fails to allege facts sufficient to plead a cause of action pursuant to 47 U.S.C. § 605. Additionally, they assert that the plaintiff lacks standing to bring the instant suit under 47 U.S.C. § 605. They also urge for the dismissal of the state law allegations, arguing that there is no reasonable basis for the Court to exercise supplemental jurisdiction.

 II. DISCUSSION

 A. Standard for Dismissal under Rule 12(b)(6)

 Federal Rule of Civil Procedure 8(a) requires that a plaintiff's complaint set forth "a short and plain statement of the claim showing that the pleader is entitled to relief . . . ." Fed. R. Civ. P. 8(a)(2). Accordingly, the plaintiff does not have to "set out in detail the facts upon which he bases his claim." Conley v. Gibson, 355 U.S. 41, 47, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957) (emphasis added). In other words, the plaintiff need only to "give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Id. (emphasis added).

 When considering a motion to dismiss a complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), *fn3" this Court must "accept as true the facts alleged in the complaint and all reasonable inferences that can be drawn from them. Dismissal under Rule 12(b)(6) . . . is limited to those instances where it is certain that no relief could be granted under any set of facts that could be proved."

 Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir. 1990) (citing Ransom v. Marrazzo, 848 F.2d 398, 401 (3d Cir. 1988)); see H.J. Inc. v. Northwest Bell Tel. Co., 492 U.S. 229, 249-50, 106 L. Ed. 2d 195, 109 S. Ct. 2893 (1989). The court will only dismiss the complaint if "'it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.'" H.J. Inc., 492 U.S. at 249-50 (quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984)).

 1. 47 U.S.C. § 605 Claim

 The defendants argue that the plaintiff's claims under 47 U.S.C. § 605 must be dismissed because the allegations are not pled in sufficient detail to put the defendants on notice as to the specific actions alleged to have given rise to the cause of action. Moreover, they assert that even if the plaintiff's complaint is pled in sufficient detail, the claim must be dismissed because 47 U.S.C. § 553 and not 47 U.S.C. § 605 applies to the interception and reception of a television broadcast transmitted directly by coaxial cable. The plaintiff rejects these arguments and maintains that its complaint is sufficiently pled, arguing that 47 U.S.C. § 605 applies to the direct reception of cable television signals.

 To resolve this controversy, this Court will first examine 47 U.S.C. §§ 553 and 605 to determine which section applies to the interception or reception of a television broadcast transmitted directly by coaxial cable. Following this determination, the Court will analyze the sufficiency of the plaintiff's allegations. If the plaintiff's allegations are sufficiently pled, then this Court will examine whether the plaintiff has standing to sue under 47 U.S.C. § 605.

 a. Analysis of 47 U.S.C. §§ 553 and 605

 To understand the issue at the heart of the instant controversy, it is helpful to first review the mechanics of the cable television industry. Television signals are transmitted in one of two ways: either through the air or over coaxial cable. *fn4" Television, whose signals are transmitted through the air is referred to as broadcast television, while television whose signals are transmitted over coaxial cable is referred to as cable television. Nevertheless, because of advances in technology, the distinctions between cable and broadcast television are becoming increasingly blurred. This overlap of technologies is due primarily to the role of commercial communication satellites in the television industry:

 
Communications satellites are fundamental to the distribution of television and cable transmissions. Satellite programmers sell their programming at wholesale rates to distributors, including cable companies. A cable company receives these signals at the cable system control center (the "headend"), and processes and retransmits the signals over coaxial cable to subscribers using closed circuit radio frequency transmissions.

 United States v. Norris, 833 F. Supp. 1392, 1394 (N.D. Ind. 1993), aff'd 34 F.3d 530 (7th Cir. 1994). Therefore, frequently a cable program is not a "pure" cable broadcast but is instead a hybrid broadcast, utilizing both broadcast and cable television technologies. *fn5" The problem with utilizing this hybrid approach, however, is that it gives non-subscribers two opportunities to intercept the cable broadcast. The non-subscriber may either intercept the cable broadcast from the satellite transmission to the cable system control center (the "headend") *fn6" or from the retransmission to subscribers over the actual coaxial cable network. *fn7" In either case, the non-subscriber is able to enjoy and use an cable service for which he did not pay. *fn8"

 To deter this unauthorized activity, Congress enacted 47 U.S.C. § 553 and 605. Section 553 was enacted thirteen years ago, as part of the Cable Communications Policy Act of 1984, specifically to remedy "a problem which was increasingly plaguing the cable industry--theft of cable services . . . ." Id. (quoting H.R. Rep. No. 934, 98th Cong., 2d Sess., 83, reprinted in 1984 U.S.C.C.A.N. 4720). This section provides that "no person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise by specifically authorized by law." 47 U.S.C. § 553(a) ...


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