United States District Court, E.D. Pennsylvania
J & J SPORTS PRODUCTIONS, INC.
RAHIM HENDERSON, et al.
R. SÁNCHEZ, C.J.
J & J Sports Productions, Inc. (J & J), a distributor
and licensor of certain closed circuit and pay-per-view
sports programming, brings claims against Defendants Rahim
Henderson, individually and d/b/a Atmosphere Bar &
Lounge, LLC (Atmosphere) and Atmosphere itself, pursuant to,
inter alia, the Communications Act of 1934, 47 U.S.C. §
605.. J & J alleges Defendants pirated
The Fight of the Century” Floyd Mayweather Jr. v.
Manny Pacquiao Fight Program (the Program) on
Saturday, May 2, 2015, the rights to which were owned by J
& J. Before the court is J & J's application for
default judgment against Defendants pursuant to Federal Rule
of Civil Procedure 55. For the reasons set forth below, the
Court grants J & J's application.
J personally served its Complaint on Defendants on January 8,
2018, at Federal Correctional Institution Ashland, where
Henderson was incarcerated. Henderson did not file any
response or enter an appearance on behalf of himself or
Atmosphere. J & J filed a request for default on February
21, 2018, which the Clerk of Court subsequently entered. On
March 14, 2018, J & J applied to the Court for a default
judgment, and a hearing was scheduled for April 12, 2018. On
April 10, 2018, the Court received a letter from Henderson
requesting a continuance of the hearing until after the end
of his incarceration-in the year 2021. The Court denied this
request without prejudice so Henderson could challenge the
default under Rule 55(c) and held the hearing on April 12,
2018, as scheduled. The application is now ripe for
plaintiff shows a defendant's “fail[ure] to plead
or otherwise defend, . . . the clerk must enter [the
defendant's] default.” See Fed. R. Civ. P.
55(a). The default is valid only if the defendant was
properly served. See Joe Hand Promotions, Inc. v.
Yakubets, 3 F.Supp.3d 261, 270 (E.D. Pa. Mar. 11, 2014).
The plaintiff may then apply to the court for a default
judgment. See Fed. R. Civ. P. 55(b)(2). Default
judgments are generally disfavored, and courts must use
“sound judicial discretion” in weighing whether
to enter a default judgment. See E. Elec. Corp. of N.J.
v. Shoemaker Const. Co., 652 F.Supp.2d 599, 604 (E.D.
Pa. 2009). Before entering a default judgment, a court must
consider three issues: “(i) whether the plaintiff will
be prejudiced if the default is denied, (ii) whether the
defendant has a meritorious defense, and (iii) whether the
default was the product of defendant's culpable
conduct.” Id. (citing Spurio v. Choice
Security Systems, Inc., 880 F.Supp. 402, 404 (E.D. Pa.
case, the Court finds that an entry of default judgment is
appropriate. J & J will be prejudiced if the default
judgment is not granted because it will be left without
recourse and neither Henderson nor Atmosphere have defended
against J & J's claims. Due to the Defendants'
failure to respond and the fact that the violation is based
on strict liability, they have not presented any claims of a
meritorious defense. See J & J Sports Prods., Inc. v.
Cruz, No. Civ. A. 14-2496, 2015 WL 2376051, at *2 (E.D.
Pa. May 18, 2015) (stating violation of § 605 is a
strict liability offense). Finally, the Defendants'
default is based on their own culpable conduct. J & J
provided proof of service on the Defendants and Henderson has
written a letter request to the Court showing that both
Defendants had notice of the litigation and failed to
respond. These facts are sufficient to satisfy the
requirements to enter a default judgment against Defendants.
to the underlying merits, J & J seeks to recover under 47
U.S.C. § 605, which prohibits the unauthorized
interception and exhibition of communications. To obtain
relief under § 605, a plaintiff must show that
“Defendants intercepted a broadcast, Defendants were
not authorized to intercept the broadcast, and Defendants
showed this broadcast to others.” J & J Sports
Prod., Inc. v. Gallegos, No. 08-201, 2008 WL 3193157, at
*3 (D.N.J. Aug. 5, 2008). A violation of § 605 is a
strict liability offense. See J & J Sports Prods.,
Inc. v. Martinez, No. 13-6885, 2014 WL 5410199, at *3
(E.D. Pa. Oct. 23, 2014). J & J established that it had
exclusive nationwide distribution rights to the Program,
Defendants intercepted the broadcast, and the Program was
broadcast at Atmosphere to patrons. See Pl.'s
Br. Supp. Appl. Default J., Osgood Aff. 2-3; Gagliardi Aff.
¶ 9. Accordingly, J & J has shown its right to
relief under § 605, leaving only the question of
determining damages for a default judgment, “the Court
need not accept the moving party's legal conclusions or
factual allegations relating to the amount of damages.”
E. Elec. Corp. of N.J, 652 F.Supp.2d at 605. Rather
than rely on the allegations in the complaint to determine
damages, “[t]he court may conduct hearings or make
referrals.” Fed.R.Civ.P. 55(b)(2)(B). The Court may
also “rely on detailed affidavits submitted by the
parties.” Cruz, 2015 WL 2376051, at *3. The
Court will thus consider the affidavit from J & J's
investigator, president, and counsel as part of the record.
plaintiff pursuing claims under § 605(e), J & J, is
entitled to recover either actual damages or statutory
damages, see 47 U.S.C. § 605(e)(3)(C)(ii), as
well as enhanced damages if the violation was committed
“willfully and for the purpose of direct or indirect
commercial advantage or private financial gain, ”
Id. § 605(c)(3)(C)(iii). In this case, J &
J seeks $10, 000 in statutory damages and $30, 000 in
enhanced damages. The court will consider each of its
requests in turn.
Court has the discretion to award statutory damages between
$1, 000 and $10, 000 per violation, which represent an
estimation-not a mathematical computation-of actual damages.
See 47 U.S.C. § 605(e)(3)(C)(i); see also
Joe Hand Promotions, Inc. v. Yakubets, 3 F.Supp.3d 261,
295-96 (E.D. Pa. Mar. 11, 2014) (citing Coxcom, Inc. v.
Chaffee, No. 05-107S, 2007 WL 1577708, at *3 (D.R.I. May
31, 2007), aff'd, 536 F.3d 101 (1st Cir. 2008)).
In estimating actual damages for the purpose of fixing the
amount of statutory damages, the Court first considers the
amount Defendants would have paid had they obtained a lawful
license. See Cruz, 2015 WL 2376051, at *5. Here, the
evidence shows that J & J charged a $3, 000 licensing fee
for a commercial establishment with a capacity of between 1
and 100 individuals, like Atmosphere, to show the Program.
See Pl.'s Aff. Supp. Appl. Default J. Ex. 2
(rate card listing price of $3, 000 for a venue with a
capacity of 1-100). Thus, J & J's actual,
out-of-pocket loss is $3, 000.
Court next considers “any profits of the violator that
are attributable to the violation which are not taken into
account in computing actual damages, ” 47 U.S.C. §
605(e)(3)(C)(i)(I). In estimating profits, the Court may
consider a number of factors including the size of the
establishment, number of patrons, number of screens
broadcasting, cover charges, and additional money spent by
patrons due to the broadcast. See Cruz, 2015 WL
2376051, at *5 (citing Yakubets, 3 F.Supp.3d at
280). In this case, Investigator Osgood, who observed the
Program unlawfully displayed at Atmosphere and submitted an
affidavit, recorded approximately 65 people in the bar (at
three different times he noted the headcount was 64, 64, and
68). See Pl.'s Br. Supp. Appl. Default J.,
Osgood Aff. 2-3. The capacity of the establishment was
approximately 100 people. Id. There is no evidence
of how many of the people attended because of the
interception, but there is evidence from Investigator
Osgood's affidavit that Atmosphere advertised the showing
of the Program on Facebook. Investigator Osgood also noted
there were four televisions displaying the Program and he
paid a $10 cover to enter the establishment. Id.
specific evidence regarding how many individuals viewed the
advertisement and chose to go to Atmosphere because of the
showing, it is reasonable to estimate that at least half of
the people attended because of the showing of the Program
(32.5 people). The people who attended because of the showing
paid the $10 cover to enter and could have reasonably spent
$20 each on food and drink ($30), totaling $975 of additional
profits for Defendants (32.5 x $30). Thus, in addition to the
$3, 000 licensing fee, the total statutory damage amount is
$3, 975. See generally Cruz, 2015 WL 2376051, at *6
(citing Yakubets, 3 F.Supp.3d at 281) (describing
estimation of statutory damages).
court may also increase the damages by an amount not more
than $100, 000, if the Court finds the violation was
committed “willfully and for the purposes of direct or
indirect commercial advantage or private financial
gain.” 47 U.S.C. §605(e)(3)(C)(iii). To recover
these enhanced damages, a plaintiff must establish that a
defendant intentionally intercepted a signal and had
knowledge of, or reckless disregard as to, the unlawfulness
of that interception. Cruz, 2015 WL 2376051, at *6.
Willfulness can be inferred from the particular nature of the
satellite programming and interception of the transmission.
See Yakubets, 3 F.Supp.3d at 285-86 (permitting
inference of willfulness from the well-pleaded facts).