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J & J Sports Productions, Inc. v. Smalls

United States District Court, E.D. Pennsylvania

October 18, 2017

LAWRENCE SMALLS, et al., Defendants.


          SCHILLER, J.

         J & J Sports Productions, Inc., sued Lawrence Smalls and Small Gnt, Inc., under the Cable Communications Policy Act, 47 U.S.C. §§ 553 and 605, for Defendants' alleged unlawful interception of J & J's pay-per-view television programming. Defendants failed to respond to the Complaint or make an appearance, and the Clerk of Court entered a default. Now before the Court is J & J's motion for default judgment. For the reasons given below, the Court grants the motion and awards damages of $2, 200.

         I. BACKGROUND

         This case is the latest round in an ongoing bout between pay-per-view licensors of professional boxing matches and commercial establishments intercepting such programming. J & J is a pay-per-view distributor and licensor. (Compl. ¶ 18.) J & J obtained exclusive nationwide commercial distribution rights to the September 13, 2014 boxing match between Floyd Mayweather Jr. and Marcos Maidana II, and then entered into sublicensing agreements with various bars and restaurants, granting them the right to display the fight for patrons. (Id. ¶¶ 16- 17.) The cost of a commercial sublicense ranged from $2, 200 to $6, 000 based on the capacity of the establishment. (Pl.'s Aff. in Supp. of App. for Def. J. Ex. 2 [Rate Card]). The price for Defendants would have been $2, 200. (Id.; Pl.'s Am. Br. at 13.)

         Lawrence Smalls is identified as the president, director, and stockholder of Small Gnt, Inc. (Pl.'s Am. Br. at 5.) Small Gnt, in turn, owns Level 7 Hookah Bar & Grill. (Compl. ¶ 14.) J & J claims that although Defendants did not obtain a sublicense to show the Mayweather-Maidana match, a private investigator observed the match being shown at Level 7. (Pl.'s Am. Br. at 3.) Thus, J & J alleges that Defendants unlawfully intercepted the program. (Compl. ¶ 19.)

         J & J filed this action against Smalls and Small Gnt on September 12, 2016. Smalls was properly served but failed to appear or respond to J & J's complaint, and the Clerk of Court entered a default on April 21, 2017. J & J then moved for default judgment. J & J's original brief in support of its motion contained numerous inaccuracies. With the Court's permission, J & J corrected those errors in an amended brief, which is now before the Court.


         Once the Clerk of Court has entered a party's default, a district court may enter a default judgment against that party. Fed.R.Civ.P. 55(b)(2). Whether to grant a default judgment is left to the discretion of the district court; a party is “not entitled to a default judgment as of right.” E. Elec. Corp. of N.J. v. Shoemaker Constr. Co., 657 F.Supp.2d 545, 551 (E.D. Pa. 2009). After the entry of default, the well-pleaded factual allegations of the complaint are accepted as true. Id. at 552. However, “the Court need not accept the moving party's legal conclusions or factual allegations relating to the amount of damages.” Id.


         A. Default Judgment - The Chamberlain Factors

         The Third Circuit has laid out three factors for courts to consider when determining whether to grant a default judgment: “(1) prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and (3) whether [the] defendant's delay is due to culpable conduct.” Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). Considering the first factor, J & J will suffer prejudice if the Court does not grant its motion for default judgment because it “will have no other way to vindicate [its] claim” against Defendants. See DISH Network L.L.C. v. Jones, Civ. A. No. 12-1273, 2012 WL 2885933, at *2 (E.D. Pa. July 16, 2012). As to the second factor, where, as here, the defendant has failed to respond, “[c]ourts often weigh this factor in favor of granting default judgment.” Grove v. Rizzi 1857 S.P.A., Civ. A. No. 04-2053, 2013 WL 943283, at *3 (E.D. Pa. Mar. 12, 2013). Finally, as to the third factor, courts often consider a defendant's complete failure to respond-as is the case here-to be evidence of “bad faith” that weighs in favor of entry of default judgment. Fed. Ins. Co. v. Secure Cargo Corp., Civ. A. No. 12-851, 2013 WL 1222653, at *3 (D.N.J. Mar. 25, 2013). Because each of the Chamberlain factors weighs against the Defendants, default judgment is appropriate, and the Court will move on to the substantive analysis of J & J's claim.

         B. Defendants' Liability Under § 553

         J & J brought this action under 47 U.S.C. §§ 553 and 605. Both of these sections “prohibit the unauthorized interception and exhibition of communications.” J & J Sports Prods., Inc. v. Cruz, Civ. A. No. 14-2496, 2015 WL 2376051, at *2 (E.D. Pa. May 18, 2015). However, §§ 605 and 553 apply to different conduct. TKR Cable Co. v. Cable City Corp., 267 F.3d 196, 207 (3d Cir. 2001). “Section 553 prohibits the unauthorized interception and transmission of cable communications, whereas § 605 prohibits the unauthorized interception and transmission of encrypted satellite cable programming.” Joe Hand Promotions, Inc. v. Yakubets, Civ. A. No. 12-4583, 2013 WL 5224123, at *2 (E.D. Pa. Sep. 17, 2013) [Yakubets I]. Thus, a defendant cannot be held liable under both sections. TKR Cable, 267 F.3d at 207.

         Because it has not shown evidence of a satellite violation, J & J requests judgment under § 553. (Pl.'s Am. Br. at 3-4.) J & J cites Yakubets I, in which the court applied a presumption in favor of ยง 553 at the default judgment stage where the plaintiff produced no evidence of a satellite violation, reasoning in part that cables are more easily hidden than satellite dishes. 2013 WL 5224123, at *4. The Court will follow this ...

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