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J & J Sports Productions, Inc. v. Brutti's LLC

United States District Court, E.D. Virginia, Norfolk Division

December 23, 2014

J & J SPORTS PRODUCTIONS, INC., Plaintiff,
v.
BRUTTI'S LLC d/b/a MANSION ALLURE & BRUTTI'S, & JOHN DOE, Defendants.

MEMORANDUM OPINION AND ORDER

RAYMOND A. JACKSON, District Judge.

Before the Court is Plaintiff J & J Sports Productions, Inc.'s Motion for Default Judgment against Defendant Brutti's LLC, d/b/a Mansion Allure & Brutti's, and an unnamed defendant, John Doe.[1] Pl.'s Mot. for Default J., ECF No. 7. On June 4, 2014, Plaintiff filed a Complaint alleging that Defendants showed the June 9, 2012 Manny Pacquiao v. Timothy Bradley, WBO Welterweight Championship Fight at Mansion Allure without Plaintiff's authorization, in violation of 47 U.S.C. §§ 553 and 605 (2013). Defendants have neither appeared nor filed an answer or motion in response to the Complaint. Plaintiff now moves this Court for a default judgment. On October 16, 2014, a hearing was held, at which Defendants failed to appear, either individually or by counsel. As stated in open court, and for reasons set forth below, Plaintiff's Motion for Default Judgment against Defendant Brutti's LLC is GRANTED.

I. PROCEDURAL AND FACTUAL HISTORY

On June 4, 2014, Plaintiff filed a two-count Complaint alleging that Defendants violated 47 U.S.C. §§ 553 and 605 by broadcasting Plaintiff's closed-circuit broadcast of the June 9, 2012 Manny Pacquiao v. Timothy Bradley, WBO Welterweight Championship Fight Program ("the Event") to patrons within Mansion Allure. Pl.'s Compl. 4-7, ECF No. 1. Plaintiff is a California corporation and nationwide closed-circuit distributor of sports and entertainment programming whose principal place of business in Campbell, California. Pl.'s Compl. ¶ 4; Gagliardi Aff. ¶ 3, August 14, 2014, ECF No. 9. Defendant Brutti's has its principal place of business at 467 Court Street, in Portsmouth, Virginia. Pl.'s Compl. ¶ 5. Mansion Allure, where the Event was broadcast, is located at 463 Court St. in Portsmouth, Virginia. Shelby Aff. 1, June 14, 2012, ECF No. 11. Plaintiff paid substantial fees to obtain distribution rights to the Event which it made available for broadcast, upon payment of a licensing fee, to various commercial establishments such as theatres, arena, bars, clubs, lounges, and' restaurants throughout Virginia. Pl.'s Compl. ¶ 6. These "sub-licensees" paid an occupancy-based licensing fee which ranged from $2, 200.00 for establishments with an occupancy rate of 100 persons and less, to $10, 200.00 for establishments with an occupancy rate of 401 to 500 persons. Gagliardi Aff., Ex. 1. The transmission of the Event was electronically coded or "scrambled, " and its signal could not be decoded without electronic decoding equipment. Pl.'s Compl. ¶ 10. Establishments which paid Plaintiff's licensing fee were provided the electronic decoding capability/satellite coordinates needed to receive the signal. Pl.'s Compl. ¶ 12.

Although the transmission of the Event was available to Defendants for purchase, Defendants did not contract with Plaintiff or any of its agents to obtain broadcast rights. Pl.'s Compl. ¶ 1; Gagliardi Aff. ¶ 7. Plaintiff alleges that on June 9, 2012, Defendant broadcast the Event to its patrons Pl.'s Compl. ¶ 11. As the Event could not have been "mistakenly, innocently, or accidentally intercepted, " Gagliardi Aff. ¶ 9, Plaintiff contends Defendants' actions were committed willfully and with the express purpose and intent to secure a commercial advantage and private gain. Pl.'s Compl. ¶ 14.

This lawsuit arose after Plaintiff began noticing a marked erosion in sales of its programming. Gagliardi Aff. ¶ 4. Plaintiff determined the cause was "rampant piracy" by unauthorized and unlicensed commercial establishments. Gagliardi Aff. ¶ 4. Plaintiff claims it has suffered losses of several million dollars of revenue due to signal piracy. Gagliardi Aff. ¶ 11. To safeguard its rights, Plaintiff embarked on a nationwide effort to identify and prosecute commercial establishments that pirate its signals. Gagliardi Aff. ¶ 5. With respect to the instant case, Plaintiff asserted that the unlawful interception and broadcasting of its programming could have been achieved by one of a number of means. They include the use of black boxes, smart cards, illegal cable drops or splices, illegal satellite authorization codes, or the purposeful misrepresentation of a commercial establishment as a residential property to enable the purchase of programming at the residential rate. Gagliardi Aff. ¶ 9. Plaintiff has not indicated which method Defendants used to intercept and broadcast the Event.

According to Plaintiff's President, Mr. Joseph M. Gagliardi, in order to identify signal pirates, Plaintiff retained, at considerable cost, auditors and law enforcement personnel and gave them its list of authorized and legal locations. Gagliardi Aff. ¶ 6. Its auditors and investigators only visited illegal locations, i.e., those establishments which had not contracted with Plaintiff. At the hearing Plaintiff's counsel entered into evidence the affidavit of Mr. Darren Shelby, an investigator who observed the Event's broadcast at Mansion Allure. Shelby Aff. 1. Shelby stated he paid a cover charge of $20.00 to be admitted. Shelby Aff. 1. He also conducted three patron headcounts: 150 patrons during the first count, 86 during the second count, and 108 during the third count. Shelby Aff. 2. Shelby also stated that Mansion Allure had a capacity of approximately 400 people. It is unclear whether this figure is the official maximum occupancy rate or merely Shelby's estimate. Shelby Aff. 1.

Plaintiff provided evidence that the licensing fee for Defendant to have legally shown the Event in an establishment with a fire code occupancy rate of 150 persons would have been $4, 200.00. See Gagliardi Aff. ¶ 8; Ex. 1 (rate card showing cost of licensing as $4, 200.00 for establishments with minimum seating of 100 to 200 persons). Though Defendant had not purchased the right to broadcast the Event to its patrons, the investigator observed various portions of the Event displayed on televisions and projection screens on three floors of Mansion Allure. Shelby Aff. 1. Specifically, Shelby's affidavit states that during his 40 minutes in Mansion Allure, he observed Bradley highlights from a previous fight, commentator Larry Merchant, and Pacquiao prepping before the fight. Shelby Aff. 1. Shelby's affidavit includes distinguishing features of the establishment such as the layout, a physical description of the bartender who served him, and license plate numbers for six vehicles located in the parking lot. Shelby Aff. 1. Shelby's affidavit also includes pictures of the exterior of Mansion Allure. Shelby Aff. 3-4.

On June 9, 2014, Defendant Brutti's was served with the Summons and Complaint, ECF No. 4, but no Answer was filed by Defendant. Plaintiff did not execute service upon Defendant John Doe. On July 28, 2014, Plaintiff filed a request for entry of Default, ECF No. 5, which the Clerk of Court granted on July 29, 2014. ECF No. 6. Plaintiff filed the instant motion and supporting memorandum, ECF No. 8, on August 5, 2014. In support of its Motion, Plaintiff submitted the aforementioned affidavit of Joseph M. Gagliardi, Plaintiff's President.

In the Complaint Plaintiff seeks statutory damages of $10, 000.00, enhanced statutory damages of an unspecified amount under 47 U.S.C. §§ 553 and 605. Plaintiff also submitted an affidavit from its counsel for attorney's fees ($2, 060.00) and costs ($442.76). Mem. in Supp. of Mot. for Default J., Ex. 1, McCann Affidavit, ECF No. 8. Defendants have not responded and the time for doing so has expired.

On October 16, 2014, this Court held a hearing on the instant motion. Defendants failed to appear, either individually or by counsel. When asked by this Court whether Plaintiff had had any telephonic or written contact with any representative of Defendants, Plaintiff's counsel responded that he had written contact via the service of the Complaint to the registered agent of Defendant Brutti's LLC and the mailing of the pleadings. Plaintiff's counsel stated that prior to filing its lawsuit his client had sent written correspondence to Defendant Brutti's in June 2013 and November 2013. At the hearing, Plaintiff also revised its damages request to $5, 000.00 in statutory damages and $25, 000.00 in enhanced statutory damages.

II. LEGAL STANDARDS

A. Jurisdiction and Venue

A federal court has subject matter jurisdiction over claims that arise under federal law. See 28 U.S.C. § 1331. Plaintiff alleges violations of 47 U.S.C. §§ 553 and 605 which give rise to a federal question and prima facie jurisdiction of the federal courts. J & J Sports Productions, Inc., v. Prestige Lounge LLC, 2013 WL 6506201, at *1 (E.D. Va. Dec. 11, 2013). Personal jurisdiction over a defendant is established when a defendant has sufficient "minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice' Intl Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)), and when the defendant is subject to the personal jurisdiction of the courts of general jurisdiction of the forum state. See Fed.R.Civ.P. 4(k)(1)(A). A business within the State clearly has sufficient minimum contacts with the forum state, and that business is subject to the jurisdiction of the courts of Virginia under Code of Virginia §§ 8.01-328.1. Joe Hand Promotions, Inc., v. The Wing Spot Chicken & Waffles, Inc., 920 F.Supp.2d 659, 662 (E.D. Va. 2013).

The requirements for personal jurisdiction are satisfied because Defendant Brutti's place of business is located in Portsmouth, Virginia, which is within the Eastern District of Virginia. Venue is proper under 28 U.S.C. § 1391 as Defendant Brutti's is located in this district and substantially all the events giving rise to the claim occurred in this district.

B. Default Judgment Standard

When a defendant ails to plead or defend, Federal Rule of Civil Procedure 55 outlines a two-step process for default judgment - first, the entry of default by the clerk, and second, the entry of default judgment by the clerk (if for a sum certain) or by the court (in all other cases). See J & J Sports Productions, Inc. v. El ...


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