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J&J Sports Productions, Inc. v. 4326 Kurz

June 30, 2009




Plaintiff, J&J Sports Productions ("J&J"), brings this action against defendants, 4326 Kurz Ltd., Jeff Kurz, and Melissa Kurz, for violations of the Communications Act of 1934 ("Communications Act"), 47 U.S.C. §§ 151, et seq. (2006), arising out of defendants' alleged showing of a June 9, 2007 televised boxing match, to which plaintiff had exclusive nationwide distribution rights for commercial establishments. Presently before the court are plaintiff's and defendants' motions for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons set forth below, the court will deny both motions because there exists a genuine issue of material fact that makes judgment as a matter of law inappropriate for either party.

I. Factual and Procedural Background

J&J is a distributor of viewing rights to pay-per-view sporting events for commercial entities, such as sports bars. (Pl.'s Mem. of Law Support of Mot. Summ. J., Aff. of Joseph Gagliardi ("JG Aff.") ¶ 8, at 2.) Defendant 4326 Kurz Ltd. is a Pennsylvania corporation that does business as a bar and restaurant called Pitcher's Pub or Pitchers Pub. (Pl.'s Statement of Material Facts ("PSOMF") ¶¶ 2-3.)*fn1 Pitcher's Pub occupies the first floor of the building at 4326 Main Street, Philadelphia, Pennsylvania, although in the two floors above there are at least two apartments. (JG Aff, Ex. B, Affidavit of Jonathan DiBello ("DiBello Aff.") at 1.) Plaintiff asserts, and defendants do not contest, that at the time of the incident giving rise to this litigation, defendants Jeff and Melissa Kurz served in some capacity as officers, directors, shareholders, or principals of 4326 Kurz Ltd. (PSOMF ¶ 5.)*fn2 Both Jeff and Melissa had supervisory capacity and control over Pitcher's Pub on the night of June 9, 2007. (PSOMF ¶ 11.)*fn3

Through an agreement with a promoter of boxing matches, Top Rank, Inc. ("TR"), plaintiff obtained an exclusive license to distribute TR's televised communication of the June 9, 2007 fight between Miguel Cotto and Zab Judah ("the fight"). The agreement granted plaintiff a license to distribute the broadcast throughout the entire United States, but only to commercial establishments-including bars, restaurants, and the like. (PSOMF ¶ 4; JG Aff. ¶ 3 & Ex. A, License Agreement ("Lic. Agreement") at 1.) Under the agreement with TR, plaintiff would receive transmission of the fight from TR via satellite and then distribute the broadcast to commercial establishments, usually through a satellite television provider, such as DirecTV. (Lic. Agreement ¶¶ 3-4; Pl.'s Mem. of Law Support of Mot. Summ. J., Aff. of Kent Mader ("Mader Aff.") ¶ 7.) In return, plaintiff would receive a fee from each commercial establishment receiving the fight. Several establishments in Pennsylvania made such arrangements with plaintiff. (JG Aff. ¶¶ 4-5.) Defendants, however, did not purchase the right to receive transmission of the fight from plaintiff. (JG Aff. ¶ 5.)

On or before June 9, 2007, the night of the fight, plaintiff generated a list of commercial establishments that did purchase rights to receive and exhibit the fight. (PSOMF ¶¶ 6-7; JG Aff. ¶ 12; JG Aff., Ex. C, List of Nationwide Establishments that Paid for Cotto/Juddah Fight.) Plaintiff hired auditors to visit-on the night of the fight-selected commercial establishments in Philadelphia not on that list. (Id.) Plaintiff instructed the auditors to observe whether these establishments were showing the fight. (Id.) At about 11:05 p.m., one of these auditors visited Pitcher's Pub, which was not on plaintiff's list of establishments that paid for the fight. (DiBello Aff. at 1.) Inside Pitcher's Pub, the auditor observed the fight being displayed on one of the four televisions in the establishment, which was open and had patrons. (Id.) The auditor's observation included the bartender operating a television remote control, a DirecTV menu appearing on the screen of one television in the bar, and the television's image switching from a baseball game to the fight. (Id.) The auditor saw the first three rounds of the fight and took pictures of a television as it displayed the fight. (Id.) The auditor did not observe a cable box anywhere in Pitcher's Pub, but also did not observe a satellite dish. (Id.) The auditor found the bar crowded and estimated the establishment had a capacity of 25 people, but that over 60 people were in the bar during his visit. (Id. at 2.)

At the time the auditor made these observations, Jeff Kurz had an active account with DirecTV for satellite television services at the address 4326 Main Street, Philadelphia, the same street address as Pitcher's Pub, although the records do not indicate a specific floor at that address. (Pl.'s Mem. of Law Support of Mot. Summ. J., Affirmation of Wayne Lonstein ("Lonstein Affirmation"), Ex. A, DirecTV Records ("DirecTV Records").) DirecTV also has records that Pitcher's Pub had an account for the address 4326 Main Street, but the account was inactive on the date of the fight. (DirecTV Records.) The parties dispute whether Jeff had a business or residential account with DirecTV.*fn4 Regardless of the type of account Jeff had, he did use this account to purchase a pay-per-view broadcast of the fight on June 9, 2007 for $44.95, the residential rate. (DirecTV Records; DSOMF ¶ 12.)

According to DirecTV's standard residential contract, DirecTV "provides digital satellite entertainment programming and services." (Lonstein Affirmation, Ex. A, DirecTV Customer Agreement ("DirecTV Cust. Agmt.") at 1.) Furthermore, the contract limits service to "private non-commercial use" and prohibits viewing programming "in areas open to the public or in commercial establishments." (DirecTV Cust. Agmt. ¶ 1(h); DSOMF ¶ 18.). Under the contract, DirecTV "or any programming provider may prosecute violations of the foregoing against you [customer] or other responsible parties." (DirecTV Cust. Agmt. ¶ 1(h).)

Plaintiff had an arrangement with DirecTV such that if any DirecTV commercial customer sought to order or receive the fight from DirecTV, DirecTV would have sent that customer to J&J. (JG Aff. ¶ 16; Mader Aff. ¶ 7.) Nevertheless, according to DirecTV Senior Director of Fraud Management, it was possible for a commercial establishment to set up a residential account with DirecTV, pay residential rates for DirecTV services, but use the account in a commercial setting. (Mader Aff. ¶ 5.)

Plaintiff's agreement with TR included provisions about assertions of claims of piracy. Specifically, the agreement stated that "TR and [plaintiff], acting jointly, shall have the right to commence or settle any claim arising out of the alleged piracy, use[,] or proposed use of the telecast" anywhere in the United States. (Licensing Agreement ¶ 6; DSOMF ¶ 14.) Further, the parties agreed to "notify each other in writing and shall consult with each other and mutually agree before commencing or settling any [piracy] claim or litigation in the territory." (Licensing Agreement ¶ 6; DSOMF ¶ 15.) TR is not a party to this lawsuit.

Plaintiff filed the initial complaint on September 13, 2007, followed by an amended complaint filed February 6, 2008. Plaintiff brings three counts, each for violation of a separate provision of the Communications Act: § 605(a) (Count I), § 605(e)(4) (Count II), and § 553 (Count III). On October 17, 2008, the court dismissed Count II*fn5 and held that plaintiff could plead violations of § 605(a) and § 553 alternatively, but could eventually only recover under one of those sections, not both. Defendants answered the amended complaint on November 10, 2008. Plaintiff filed its motion for summary judgment on December 16, 2008. Defendants responded and plaintiff replied. On January 16, 2009, defendants filed their cross-motion for summary judgment, for which their supporting memorandum sets forth arguments almost identical to their response to plaintiff's motion.*fn6 Plaintiff responded.

II. Standard of Review

Either party to a lawsuit may file a motion for summary judgment, and it will be granted only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party bears the initial burden of showing that there is no genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met its initial burden, the nonmoving party may not rely merely on bare assertions, conclusory allegations, or suspicions, see Fireman's Ins. Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982), but instead must present "specific facts showing that there is a genuine issue for trial," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.10 (1986) (quoting Fed. R. Civ. P. 56(e)). "If the [nonmoving] party does not so respond, summary judgment should, if appropriate, be entered against that party." Fed. R. Civ. P. 56(e)(2).

"Facts that could alter the outcome are 'material,' and disputes are 'genuine' if evidence exists from which a rational person could conclude that the position of the person with the burden of proof on the disputed issue is correct." Ideal Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d 737, 743 (3d Cir. 1996) (citation omitted). For elements on which the nonmoving party bears the burden of production, the party must show more than "[t]he mere existence of a scintilla of evidence," but instead must present concrete evidence supporting each essential element of its claim. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986); Celotex, 477 U.S. at 322-23. Thus, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial.'" Matsushita, 475 U.S. at 587 (citations omitted).

When a court evaluates a motion for summary judgment, "[t]he evidence of the non-movant is to be believed." Anderson, 477 U.S. at 255. Furthermore, "[a]ll justifiable inferences are to be drawn in [the nonmoving party's] favor." Id. "Summary judgment may not be granted . . . if there is a disagreement over what inferences can be reasonably drawn from the facts even if the facts are undisputed." Ideal Dairy, 90 F.3d at 744 (citation omitted). However, "an inference based upon a speculation or conjecture does not create a material factual dispute sufficient to defeat entry of summary judgment." Robertson v. Allied Signal, Inc., 914 F.2d 360, 382 n.12 (3d Cir. 1990) (citation omitted). Where, as here, the parties have filed cross-motions for summary judgment, "Rule 56(c) does not mean that the case will necessarily be resolved at the summary judgment stage ...

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