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J & J Sports Productions, Inc. v. Henderson

United States District Court, E.D. Pennsylvania

December 17, 2019

J & J SPORTS PRODUCTIONS, INC.
v.
RAHIM HENDERSON, et al.

          MEMORANDUM

          JUAN R. SANCHEZ, C.J.

         Plaintiff J & J Sports Productions, Inc. (J & J) moves pursuant to Federal Rule of Civil Procedure 59(e) to alter or amend a default judgment entered against Defendants Rahim Henderson, individually and d/b/a Atmosphere Bar & Lounge, LLC, and Atmosphere Bar & Lounge, LLC (Atmosphere) on August 28, 2019. The default judgment awarded J & J damages for Defendants' violation of the Cable Communications Policy Act of 1934, 47 U.S.C. § 605, in the total amount of $15, 900, and held Henderson jointly and severally liable for $3, 000 of the award. J & J asks this Court to increase the damages award and to hold Henderson individually liable for the entire award, arguing these changes are necessary to correct clear errors of law in the original default judgment. For the reasons stated below, the Court will deny J & J's motion. However, because upon further review, it appears the Court improperly held Henderson individually liable, the Court will alter its August 28, 2019, judgment to reflect that Henderson is not individually liable for any portion of the damages award.

         BACKGROUND

         J & J sued Defendants for intercepting and broadcasting at Atmosphere a professional boxing match (the Program) to which J & J owned the exclusive rights, alleging Defendants' conduct violated the Cable Communications Policy Act. After Defendants failed to respond to the Complaint, J & J obtained entry of their defaults and filed an application for default judgment. On August 28, 2019, after a default judgment hearing, this Court entered an Order granting J & J's application and entering a default judgment against Defendants. See Order, Aug. 28, 2019, RCF No. 23. The Order awarded J & J $15, 900 in damages, comprised of $3, 975 in statutory damages and $11, 925 in enhanced damages. The Order also provided Henderson was jointly and severally liable for $3, 000 of the award-the amount of the licensing fee Defendants would have had to pay to show the Program lawfully.

         J & J thereafter filed the instant motion to alter or amend judgment pursuant to Federal Rule of Civil Procedure 59(e) on September 26, 2019. J & J argues relief is warranted because the Court committed clear error by (1) calculating statutory damages as an "estimation of actual damages" and (2) holding Henderson jointly and severally liable for only $3, 000 of the damages award. J & J asks the Court to amend its August 28, 2019, Order to increase the award of statutory damages to $10, 000 and to hold Henderson jointly and severally liable for the entire award.

         DISCUSSION

         A party moving to alter or amend a judgment pursuant to Federal Rule of Civil Procedure 59(e) must demonstrate one of three grounds: "(1) an intervening change in the controlling law; (2) the availability of new evidence not available previously; or (3) the need to correct clear error of law or prevent manifest injustice." N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995) (internal quotation marks and citations omitted). In this case, J & J invokes the third ground, arguing it has established this Court committed clear error in calculating statutory damages and determining the extent of Henderson's individual liability. "A finding of clear error requires a definite and firm conviction that a mistake has been committed." United States v. Jasin, 292 F.Supp.2d 670, 676 (E.D. Pa. 2003) (citations and quotation marks omitted).

         As a threshold matter, Rule 59(e) motions are granted sparingly, and they cannot be used merely to have a court "rethink a decision already made." Jarzyna v. Home Properties, L.P., 185 F.Supp.3d 612, 622 (E.D. Pa. 2016) (citations omitted). Many of the arguments J & J makes in this motion are identical to arguments made in its application for default judgment. See generally App. for Default J., ECF No. 14-1. The Court considered those arguments in ruling on J & J's application for default judgment but found them unpersuasive. Because however, the Court did not specifically address J & J's arguments in its August 28, 2019, Memorandum, the Court will discuss those arguments herein.

         J & J first argues the Court committed clear error in calculating statutory damages under 47 U.S.C. § 605(e)(3)(C)(i)(II). Under § 605(e)(3)(c)(i), a plaintiff may elect to have damages calculated under one of two provisions-the actual damages provision or the statutory damages provision. The actual damages provision permits a plaintiff to "recover the actual damages suffered by him as a result of the violation and any profits of the violator that are attributable to the violation which are not taken into account in computing the actual damages." 47 U.S.C. § 605(e)(3)(C)(i)(I). In determining profits under the actual damages provision, the plaintiff is required to prove the violator's gross revenue, and the violator is required to prove any deductible expenses and any profit not attributable to the violation. See id.

         The statutory damages provision, in contrast, permits a plaintiff to "recover an award of statutory damages for each violation ... in a sum of not less than $1, 000 or more than $10, 000, as the court considers just." Id. § 605(e)(3)(C)(i)(II). Unlike the actual damages provision, the statutory damages provision is silent as to how the amount of statutory damages is to be determined. See Id. The statutory damages provision gives the Court discretion to award the amount it "considers just." See id.

         Although the Third Circuit has not addressed the issue, most of the district courts within the Third Circuit, including this Court, have concluded that statutory damages are merely an alternative to actual damages, and as such, should be determined by estimating, rather than calculating, actual damages for a violation. See, e.g., J& J Sports Prods., Inc. v. Cruz, No. 14-2496, 2015 WL 2376051, at *4-5 (E.D. Pa. May 18, 2015); Joe Hand Promotions, Inc. v. Yakubets, 3 F.Supp.3d 261, 274 (E.D. Pa. 2014) (estimating actual damages to award statutory damages under similar provision 47 U.S.C. § 553); J & J Sports Prods., Inc. v. Tibiri-Tabara, LLC, No. 18-8819, 2019 WL 3402494, at *4 (D.N.J. July 26, 2019) ("[A]n award of statutory damages pursuant to § 605 should approximate actual damages."); Joe Hand Promotions, Inc. v. Tickle, No. 12-1874, 2016 WL 393797, at *6-7 (M.D. Pa. Feb. 2, 2016) (applying Yakubets approach to award statutory damages under 47 U.S.C. § 553); Kingvision Pay-Per-View, LTD. v. Lardo, No. 10-0059, 2010 WL 3463316, at *3 (W.D. Pa. Sept. 1, 2010) (awarding a flat sum for a violation to compensate plaintiff for licensing fee and defendants' estimated profits).[1] This method typically results in a damages award that includes the cost to license the show legally and an estimate of the defendant's profits from the violation. See Yakubets, 3 F.Supp.3d at 282.[2]

         In calculating statutory damages in this case, the Court followed the widely accepted approach of estimating actual damages and Defendants' profits from the violation. As a result, the Court awarded J & J statutory damages of $3, 000 for the fee Defendants would have paid to broadcast the Program lawfully. The Court awarded J & J an additional $975 in statutory damages by estimating Defendants' profits.[3] Finally, the Court awarded enhanced damages by applying a multiplier of three because the violation was made for the purpose of commercial advantage. The Court entered judgment against Defendants for a total of $15, 900.

         Under J & J's first claim, J & J makes four arguments regarding the Court's damages award. J & J first argues the Court's estimation of actual damages under the statutory damages provision of 47 U.S.C. § 605 is a clear error of law because it conflates the provision with the actual damages provision in § 605, rendering the statutory damages provision superfluous. Second, J & J argues the Court's consideration of Defendants' profits in the context of statutory damages was a clear error of law because the statutory damages provision does not mention profits. Third, J & J argues the Court committed clear error by improperly placing the entire burden on the plaintiff to establish profits under the statutory damages provision even though the actual damages provision does not require as much. Finally, even if the Court's estimation of actual damages is correct, any estimation of actual damages is not per se only the licensing fee for broadcasting the Program legally. The Court addresses each argument in turn.

         J & J first argues the Court's methodology conflates the actual damages and statutory damages provisions because the estimation of actual damages under the statutory damages provision and the computation of damages under the actual damages provision are "effectively the same." Mot. to Alter J. 10-11. J & J argues Congress "would not have bothered to make separate provisions for actual and statutory damages if statutory ...


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