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J & J Sports Productions, Inc. v. Cruisin1, Inc.

United States District Court, E.D. Michigan, Southern Division

April 12, 2019

J & J SPORTS PRODUCTIONS, INC., Plaintiff,
v.
CRUISIN1, INC., CRUISIN CLUB, AND TIGER WHITE AND STANLEY KALISEK, Individually, jointly and severally, Defendants.

          ORDER GRANTING PLAINTIFF'S RENEWED MOTION FOR ENTRY OF DEFAULT JUDGMENT AS TO CRUISIN1, INC. AND DISMISSING DEFENDANTS TIGER WHITE AND STANLEY KALISEK (ECF NO. 33)

          TERRENCE G. BERG UNITED STATES DISTRICT JUDGE.

         In this case, Defendants allegedly intercepted and exhibited for public viewing at their bar the boxing event entitled Manny Pacquiao v. Timothy Bradley, II WBO Welterweight Championship Fight Program for private financial gain without paying the requisite commercial licensing fee to Plaintiff. See, e.g., ECF No. 1.

         Before the Court is Plaintiff's “Renewed Motion for Default Judgment Against Defendant Cruisin1 Inc., and to Dismiss Defendants, Tiger White, and Stanley Kalisek.” ECF No. 33. The record reflects Cruisin1 Inc. was properly served with notice of this pending lawsuit through service on its resident agent, Cheyenne Usewick, on July 3, 2017. ECF No. 8; ECF No. 5-1, PageID.27 (corporate entity details). Defendant Cruisin1 Inc. has failed to respond to the complaint or otherwise plead. On July 26, 2017, Plaintiff obtained a clerk's entry of default. ECF No. 12.

         Once a default is entered against a defendant, that party is deemed to have admitted all the well-pleaded allegations in the complaint pertaining to liability. See Ford Motor Co. v. Cross, 441 F.Supp.2d 837, 846 (E.D. Mich. 2006) (citing Matter of Visioneering Construction, 661 F.2d 119, 124 (6th Cir. 1981)).

         On January 22, 2018 the Court held a hearing on Plaintiff's motion for default judgment; only counsel for Plaintiff appeared. Although Plaintiff requested a judgment on both liability and an award of damages, the Court concluded that it would be appropriate to enter judgment in favor of Plaintiff and against Defendant Cruisin1 Inc. on liability only at that time. This is because Plaintiff sought and was granted leave to amend its complaint, dismissing one defendant and adding two new individual defendants who Plaintiff believed may be liable. See Amended Complaint, ECF No. 18; and Stipulation and Order, ECF No. 19. Because the complaint sought joint and several liability against all defendants, the Court thought it proper to await the determination of any amount of damages until after the litigation regarding the additional defendants is completed.

         Judgment was therefore entered in favor of Plaintiff and against Defendant Cruisin1 on the issue of liability only.

         Plaintiff now moves to enter default judgment against defendant Cruisin1 on the issue of damages, claiming that “[t]here is sufficient evidence to calculate and liquidate damages with the need for an evidentiary hearing to establish damages.” ECF No. 33, PageID.163. Plaintiff alleges that the cost of the program-if defendants had legally purchased the rights to display it-was $3200.00. ECF No. 33-6 (rate card). Plaintiff claims as well to have incurred fees and costs in relation to this action totaling $7, 201.25 ($6, 198.50 in attorney's fees, and $1002.75 in costs). ECF No. 33-7 (Plaintiff's counsel's time and expense tracking).

         Plaintiff also seeks judgment against defendant Cruisin1 in the amount of $110, 000.00, for “enhanced statutory damages, ” plus $7, 201.25 for “reasonable attorney fees [and] costs, ” plus “statutory interest on the judgment.” ECF No. 33, PageID.164. Plaintiff further seeks to dismiss defendants Tiger White and Stanley Kalisek from this case.

         For the reasons explained below, the Court GRANTS Plaintiff's Renewed Motion for Default Judgment Against Defendant Cruisin1 Inc., and to Dismiss Defendants, Tiger White, and Stanley Kalisek, awards damages of $10, 000, and attorneys' fees and costs of $7, 201.25. ECF No. 33.

         I. Statutory Damages

         A. Communications Act of 1934 - 47 U.S.C. § 605

         The Communications Act of 1934, as amended, prohibits the unauthorized interception of radio communications. 47 U.S.C. § 605(a). That section has been interpreted as outlawing satellite signal piracy and applies in this case. Cablevision of Michigan, Inc. v. Sports Palace, Inc., 27 F.3d 566 (6th Cir. 1994). Plaintiff's complaint establishes the elements of liability required to state a claim under 47 U.S.C. § 605.

         Section 605 permits recovery of actual damages or statutory damages of between $1, 000-$10, 000 for each non-willful violation of this section. 47 U.S.C. § 605(e)(3)(C)(i)(I) & (II). Non-willful violation of this section is a strict liability offense-it is unnecessary to prove intent or knowledge to establish liability under the Act. Joe Hand Promotions, Inc. v. Easterling, No. 4:08-cv-1259, 2009 WL 1767579 at *4 (N.D. Ohio June 22, 2009), citing Int'l Cablevision, Inc. v. Sykes, 997 F.2d 998, 1004 (2d Cir. 1993) and Kingvision Pay Per View Ltd. v. Williams, 1 F.Supp.2d 1481, 1484 (S.D. Ga. 1998).

         The court also has discretion to increase the award by up to $100, 000.00 for willful violations of the act. 47 U.S.C. § 605(e)(3)(C)(ii) (“In any case in which the court finds that the violation was committed willfully and for purposes of direct or indirect commercial advantage or private financial gain, the court in its discretion may increase the award of damages, whether actual or statutory, by an amount of not more than $100, 000 for each violation of subsection (a) of this section.”). The statute does not define “willful, ” but in Joe Hand Promotions, Inc. v. Easterling, the Northern District of Ohio collected cases discussing the parameters of willfulness under Section 605,

“The Supreme Court has defined “willful” in the context of civil statutes as conduct showing “disregard for the governing statute and an indifference to its requirements.” Transworld Airlines, Inc. v. Thurston, 469 U.S. 111, 127, 105 S.Ct. 613, 83 L.Ed.2d 523 (1985).
For purposes of § 605, courts have identified conduct as “willful” where there were repeated violations over time, or there was a sophisticated understanding of the satellite programming industry and there was a violation of the statutes that regulate the conduct. Cable/Home Communication Corp. v. Network Prod., 902 F.2d 829, 851 (11th Cir. 1990); Home Box Office v. Champs of New Haven, Inc., 837 F.Supp. 480, 484 (D. Conn. 1993).
Other district courts have ruled that a court may draw an inference of willfulness from a defendant's failure to appear and defend an action in which the plaintiff demands increased statutory damages based on allegations of willful conduct. Time Warner Cable of New York City, [a Div. of Time Warner Entm't Co., L.P. v. Olmo, 977 F.Supp. 585, 589 (E.D.N.Y. 1997)]; Fallaci v. The New Gazette Literary Corp., 568 F.Supp. 1172, 1173 (S.D.N.Y. 1983).
One district court has interpreted 47 U.S.C. § 605(e)(3)(C) (ii) to include substantial unlawful monetary gains by a defendant as an appropriate factor to consider when exercising discretion in increasing the amount of statutory damages. Home Box Office, 837 F.Supp. at 484.
Another district court has required that there must be egregious circumstances before awarding maximum statutory damages. Joe Hand Promotions v. Burg's Lounge,955 ...

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